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You may not be familiar with regulatory environments.

The whole point of an internal process is that otherwise the bank will need a higher regulatory capital to cover credit risk (in particular counterparty risk) for the same portfolio.

Making it public would not change that. And that is a significant benefit. For some reason I don't manage to dig up the figures right now, but I remember that under Basel 2 and 3 it was a drop of about 40% of the credit risk capital.

Anyway I wouldn't terribly mind if risk evaluation was no longer an internal process but a public service for which the banks/insurances would be charged.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Tue Mar 5th, 2013 at 03:01:07 AM EST
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