The regulatory use of credit ratings in bank capital requirement regulations

  title={The regulatory use of credit ratings in bank capital requirement regulations},
  author={Rolf H. Weber and Aline Darbellay},
The paper addresses recent developments in international bank capital requirement regulations. A major change over the last decade has been the involvement of credit rating agencies in the measurement of bank capital requirements in the Basel II Accord. The proposed way of proceeding is expected to incentivise banks to improve their risk management practices. The authors argue, however, that the ratings-based regulation has negative effects on the financial markets. The paper analyses its… CONTINUE READING

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