Use of OECD ratings in US market risk proposals questioned

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US regulators might have backed the wrong horse in their efforts to find a replacement for sovereign credit ratings in trading book capital rules, a Dodd-Frank Act requirement. The alternative they picked in their December 7 proposals – the country risk classifications (CRCs) produced by the Organisation for Economic Co-operation and Development (OECD) – is a measure of currency convertibility risk, rather than credit risk.

"The CRCs are meant to reflect transfer and convertibility risk and

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