‘Step-in risk’ could become part of Basel framework
Risks could be integrated into Pillar 1 and/or Pillar 2
The Basel Committee on Banking Supervision (BCBS) is considering how to broaden the Basel framework to include "step-in risk", and launched a preliminary consultation on December 17.
Step-in risk refers to the possibility a bank may step in to assist a third-party firm or entity, even if it is under no contractual obligation to do so, because the bank fears for its reputation.
Such risks came to the fore in the 2008 crisis, as many banks supported structured investment vehicles, money market
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