Banks not ready for advanced IRB, says Trema speaker
Many international investment banks are not yet ready to implement the advanced internal-ratings-based approach to measuring credit risk, according to a controversial speaker at this week's Trema World Forum in Monaco.
“The complexity could overwhelm many medium-sized banks,” he said.
Chorafas also criticised banks for spending lavishly on capital allocation databases. “Citi[group] spent $30 million making the most eloquent database. The result is that no-one used it because it had 25% errors.”
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