Newsletter July/August 2013: Basel finds wide variation in bank credit risk weights

BASEL – Significant variation in the way that some of the world’s largest banks assess credit risks in their banking books is revealed in the latest study undertaken by the Basel Committee aimed at trying to ensure a fair and consistent application of its global rules. Many of the largest banks determine the risk weighting they assign to their assets (RWAs), according to their own internal models. The level of these RWAs sets the amount of safety capital banks should hold.