Ingves: internal modelling may create too much complexity
Complexity has “undesirable” side effects, Ingves says
Internal modelling introduces complexity and creates a number of unappealing side-effects, Basel Committee on Banking Supervision chairman Stefan Ingves said on December 2.
Delivering a keynote address in Santiago, Chile, where the Basel Committee had just met, Ingves said the post-crisis regulatory framework "continues to be quite complex". Calculating regulatory capital requirements typically requires several thousand parameters, he said.
"Complex rules can result in a number of undesirable
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