Sunday 17 December 2017

Banks 'under-rate risk' to improve capital ratio – BIS

GLOBAL banks have improved their capital ratios in part by understating the riskiness of their assets, not by raising their ability to stem losses, the Bank for International Settlements (BIS) has warned.

Regulators have been told to monitor the use of internal risk models by banks rather than harder data, in the annual report of the BIS.

The BIS warned of "window-dressing" of bank assets that raises questions about the use of internal risk assessments by lenders.

The BIS adds to a chorus of international regulators increasingly looking at leverage to gauge banks' financial strength.

Irish Independent

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