Old Lady: banks must reduce reliance on rating agencies
The Bank of England has called for the links between credit ratings and capital requirements to be reduced.
The Bank said in its Financial Stability Report, out Friday: "Banks should not hold assets with risks that they cannot understand or manage. In part, this might be achieved by reducing the reliance of capital regulation on rating agencies."
To do this, the Bank suggested providing capital incentives to firms that use both external and internal ratings, and for those that carry out due
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