External Credit Rating System and Internal Credit Rating System

Author: Luo Ping
Publisher:
Publish Date: 2004-02-01
Features: We believe this book will help China's commercial banks and regulatory authorities deepen their research on the New Capital Accord. Through studying and researching the advanced concepts and risk management methods represented by the New Capital Accord, we hope to further improve the risk management level of China's commercial banks and the regulatory level of regulatory authorities. External Rating and Internal Rating Systems consists of two research reports by the Basel Committee on Banking Supervision. The first report, Credit Rating and Additional Sources of Credit Quality Information, introduces the standard approach for measuring credit risk under the New Capital Accord, which adopts external rating agencies to determine risk weights. This research report comprehensively describes the overall situation of external ratings and other supplementary information sources related to external ratings. The second report, Current Status of Internal Rating Systems in Group of Ten Countries Commercial Banks, introduces the internal rating-based approach for measuring credit risk under the New Capital Accord. The internal rating-based approach is the core of the New Capital Accord. Through this approach, banks can calculate capital adequacy based on their own assessments of borrowers and exposures, enhancing risk sensitivity.