In the slide talking about an example of a bank having $10 billion as capital and about the difference between Standardized Approach and Internal Ratings Based approach, the author erroneously says that under standardized approach, the said bank will be able to give only 8% of 75% of $10 bn as loans. Instead the statement should be that minimum capital adequacy amount that the bank needs to keep will be 8% of 75% of 10 bn and the rest can be given as loans. Kindly correct my understanding if I am wrong

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Last answered:

09 Nov 2022

Posted on:

30 Jul 2022

Error in the slide about capital adequacy

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Posted on:

09 Nov 2022