Limited RWA gains support rethink on Fed output floor
Advanced approaches cut RWAs only marginally across US banks
US banks’ gains from internal model usage, in risk-weighted assets (RWAs) terms, are already limited, suggesting the Basel III output floor would have little practical impact even if implemented – and supporting regulators’ decision to drop it from the latest endgame proposal, a Risk Quantum analysis suggests.
The most recent available data as of end-2025 indicates that, under the current dual
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