The survey will examine validation processes for specific asset classes covered in the new Accord, including corporate exposures, specialised lending, small and medium-sized entities, bank exposures, retail, and sovereigns. It will be conducted interactively through web-based technology and through participant interviews. Surveyparticipants will complete the questionnaires during January. The results and a list of participating organisations will be available in April 2003. Professional services firm PricewaterhouseCoopers will act as consultants to the survey.
The associations said they decided to undertake the survey after the Basel Committee on Banking Supervision, in its second consultative package, set out the minimum requirements financial institutions must meet in order to use the IRB approach. One of the requirements will be forbanks to demonstrate their capabilities to validate their estimates of default probabilities and the techniques used to assign internal ratings. Specific standards for validation, however, will be left to the discretion of national regulators. The survey is intended to provide guidance to regulators, the associations said.