Basel working group suggests "pragmatic" approach to credit risk expected losses
BASEL - A working group of the Basel Committee of banking supervisors has proposed "a pragmatic approach" to treating expected losses in arriving at a capital charge for credit risk under the internal ratings based (IRB) approach of the proposed Basel II banking accord.
The Committee said the capital charge for unexpected losses (UL) is uncontroversial, but the banking industry's reaction to a capital charge for expected losses (EL) is generally negative.
In a paper issued in July, the Committee's Joint Accounting Task Force/Models Task Force
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