RBI's Gopinath on CRAs
Capital requirements that are based solely on credit ratings will need to be replaced by a more granular and nuanced approach, said Shyamala Gopinath, a deputy governor of the Reserve Bank of India.
Gopinath said the understanding of what ratings conveyed need to change. She mentioned that a AAA rating for a bond needed to be interpreted differently from the same rating on a collateralised debt obligation tranche.
She added that regulators also needed to take into account the differential risk
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