Asia Risk: The Basel Committee is currently reviewing its approach to risk-weighted assets (RWAs) – is the present approach conceptually valid?
Paul Harrald *: Conceptually valid, yes, but in practice there are plainly difficulties. Currently we have the situation where two separate banks could assign very different RWAs to the same portfolio even with identical risk management practices. There has been the insinuation that this is evidence of “gaming”, but it need not be. For example, there has
The week on Risk.net, December 2–8, 2017Receive this by email