• Bookkeeping

    Introduction to Credit Risk Chapter 1 Managing Portfolio Credit Risk in Banks

    The PRA considers that its proposals would reduce RWA variation across firms using the IRB approach, which would facilitate effective competition through a more level playing field between firms. In addition, the PRA considers that its proposals to reduce the complexity and enhance the transparency of its EAD modelling standards would increase the accessibility of the IRB framework, which could be beneficial for firms currently using the SA that are considering applying for IRB permissions. 4.283 The PRA currently has an expectation that enables firms to model EAD directly in place of the CF estimates that are required by the CRR. 4.26 The PRA considers that firms would need a…