Revealing the secrets behind RWA vanishing tricks

A weighty issue

Duncan Wood, editor, Risk magazine

It's not hard to understand the scepticism about risk-weighted asset (RWA) numbers. They can be very different at banks that appear fairly similar and even zip around at the same institution from one period to the next – analysts at Barclays revealed last year that the risk-weight used for highly rated corporate loans at Commerzbank and UBS jumped almost 70% between 2010 and 2011, while falling 30% at Crédit Agricole.

So, when a bank claims to have cut RWAs – thereby reducing its regulatory capi

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