Basle Committee Changes Rules On Risk-Based Capital Adequacy


The Basle Committee on Banking Supervision, part of the Bank for International Settlements (BIS), has modified its regulations on risk-based capital adequacy calculation. The rule change involves removing a minimum capital charge known as the "floor".

The floor previously applied to banks' internal models of what the Committee calls "specific risk". Specific risk is one component of capital adequacy calculation, designed to protect against bonds falling in price because of factors related to

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