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Niche lenders brace for Basel

Banks with niche lending businesses are scrambling to assemble enough data to allow them to benefit from Basel II's most advantageous capital provisions. Gallagher Polyn reports on one successful initiative.

Last year, a consortium of leading project finance lenders and Standard & Poor’s Risk Solutions, the rating agency’s consulting division, teamed up to tackle a looming problem for niche lenders: where to get adequate expected-loss data to qualify for the advanced internal ratings-based (IRB) approach under the Basel II capital Accord?

In recent years, with the aid of consultants and national

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The wild world of credit models

The Covid-19 pandemic has induced a kind of schizophrenia in loan-loss models. When the pandemic hit, banks overprovisioned for credit losses on the assumption that the economy would head south. But when government stimulus packages put wads of cash in…

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