Chinese banks seek global standards

Risk management

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China's major banks are tackling the demands of the foundation internal ratings-based (IRB) approach head on, rather than implementing the standardised approach first under the Basel II capital accord (see box). The decision to bypass the less complicated version was taken by the banking watchdog, the China Banking Regulatory Commission (CBRC), which has set the requirements and timetable for banks' compliance. But is it the right choice?

The benefits of implementing the foundation IRB approach i