Credit rating agency places new emphasis on using op risk as a rating element

Editor's blog

Fitch Ratings has introduced a new quantitative tool aimed at enhancing its analysis of bank regulatory capital adequacy. At the moment it only captures credit risk, but the final version will include high-level data for market and operational risk. The Fitch report, 'Regulatory Capital Ratios: A Case Study' highlights the danger that the relative share of capital for operational risk could increase given the high incidence of fraud, hasty mergers of financial institutions, unwinding of complex

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Credit risk & modelling – Special report 2021

This Risk special report provides an insight on the challenges facing banks in measuring and mitigating credit risk in the current environment, and the strategies they are deploying to adapt to a more stringent regulatory approach.

The wild world of credit models

The Covid-19 pandemic has induced a kind of schizophrenia in loan-loss models. When the pandemic hit, banks overprovisioned for credit losses on the assumption that the economy would head south. But when government stimulus packages put wads of cash in…

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