BASEL IV & CREDIT RISK MANAGEMENT (WHAT WILL BE THE CAPITAL IMPACT ON THE BANKS)
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 Published On Mar 13, 2023

#BASEL4 #BASELACCORD #ECB #CREDITRISK #marketrisk #datascience
#finance #FINANCIALREGULATION

Basel IV is a follow up to Basel III. It will have significant impact on the banks. Regulators want it to reduce degree of variability in Capital assessment and harmonize how banks calculate risk capital. For corporates with greater than 500 million in turnover, banks can not use the internal models. Basel IV introduces output floor which ensures that the RWA from bank’s internal estimates is at least 72.5% of the standardized approach (regulatory approach). Besides, there are changes to CVA and operational risk frameworks

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