Don't rely too heavily on capital-adequacy models

Supervisors should guard against placing undue reliance on the overall level of capital implied by economic capital models in assessing capital adequacy, a new paper from the Bank for International Settlements posits.

The research also recommends that a bank using the model in its dialogue with supervisors, should be able to demonstrate how the economic capital model has been integrated into the business decision-making process in order to assess its potential impact on the incentives affecting

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here:

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: