'No-deal' Brexit would make UK banks add risk weight to EU bonds
UK Treasury says failure to agree EU exit deal would force capital charges
UK banks face capital charges for risky European Union sovereign exposures following a 'no-deal' Brexit, according to a newly published government proposal.
Currently, the EU’s Capital Requirements Regulation (CRR) applies a 0% risk weight to EU government bonds under the standardised approach to credit risk, and also allows all banks – even those using internal models for other types of credit risk – to use the standardised approach for sovereign exposures. This means EU banks can currently
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