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Tags: Basel | Banks | Calculate | Risk

Basel Considers Changing How Banks Calculate Risk

Friday, 05 July 2013 08:20 AM

Global regulators are considering changing the way banks calculate risks on their books to ensure that lenders hold enough capital and restore trust in the tarnished sector.

The Basel Committee of banking supervisors from top financial centers said on Friday that its study of 100 banks showed that models used to calculate risk varied considerably.

Such differences could result in the reported capital ratios for some banks varying by as much as 2 percentage points, the committee said.

"While some variation in risk weightings should be expected with internal model-based approaches, the considerable variation observed warrants further attention," Basel Committee Chairman Stefan Ingves said.

Basel's review of risk weights on trading books came up with similar variations at the start of the year and regulators have said that investors will remain cautious about the sector's stability until they have faith in the numbers used to determine capital buffers.

The two studies are expected to be seen by regulators in Britain and the United States as further evidence to back their calls for speedy reform.


© 2022 Thomson/Reuters. All rights reserved.


FinanceNews
Global regulators are considering changing the way banks calculate risks on their books to ensure that lenders hold enough capital and restore trust in the tarnished sector.
Basel,Banks,Calculate,Risk
174
2013-20-05
Friday, 05 July 2013 08:20 AM
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