Looming US Basel endgame redraft sparks calls to save IRB
Experts say 20 years of data makes credit risk models more appropriate than standardised approach
Large banks in the US are contemplating a last-ditch effort to save regulatory capital models for credit risk, as the new Republican presidential administration sets the stage for a potentially far-reaching review of draft capital rules proposed by Democratic regulators.
When the US prudential agencies set out their suggested version of the Basel Committee on Banking Supervision’s post-crisis framework in July 2023 – dubbed the Basel III endgame – they advocated removing the internal ratings
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