Basel set to hammer Japanese megabank capital ratios

Sharp increase in risk weights for unrated corporates could lead to 30% jump in RWAs

Japan_yen_hammer_Getty-web.jpg
Hammer time: new Basel rules, agreed on December 7, floor the outputs from Japanese banks' internal models at 72.5% of the standardised approach

Global banking rules agreed in December could inflate the risk-weighted assets (RWAs) of Japan’s largest banks by as much as 30% and slash capital ratios, with exposure to unrated corporates the main culprit.

While Japanese banks are allowed to use their own models to determine the creditworthiness of companies to which they are exposed, new Basel Committee rules, agreed on December 7, floor the outputs from their internal models at 72.5% of the standardised approach.

“There is a big

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: