BIS questions banks' internal risk models

06/24/2013 | Bloomberg

The Bank for International Settlements is concerned about the way banks have improved capital ratios, saying regulators should look into use of internal risk models. "Market commentary has suggested that much of this trend reflects banks' optimisation of risk-weighted assets -- the redesign of transactions in order to lower capital requirements -- rather than a genuine increase in loss absorption capacity," according to the BIS.

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