Hit the floor: banks fear Basel curbs for capital models

Regulators argue a backstop is needed to avoid too-low modelled numbers


There are not many ways in which internal models are like sports cars, but plans to impose a floor on modelled capital numbers has brought some parallels to light. In effect, the floor is like a speed limit – a bank can drive as slowly as it likes, but if its models suggest it can safely put its foot down, the limit takes effect. And if that limit is too low, of course, a bank may as well trade in the sports car for something that requires less maintenance.

Sports car owners hate the idea. "Gen

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: