Addressing the challenges of Standardized Credit Risk Assessments for bank exposures under Basel III

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In the aftermath of the global financial crisis, regulators from 28 jurisdictions worldwide within the Basel Committee on Banking Supervision (BCBS), agreed on a new international standard for strengthening banks. The agreement was finalized in 2017 and the EU has already implemented most of the global standards known as Basel III.

Among the new requirements of the revised Standardized Approach for Credit Risk (SA) is the Standardized Credit Risk Assessments (SCRA), which will apply to a bank’s risk exposures to its bank and financial institution counterparties, in the hope of encouraging better counterparty risk management practices.

In this whitepaper, S&P Global Market Intelligence addresses the challenges of Standardized Credit Risk Assessments for bank exposures under Basel III, including changes to risk-weighted assets and SCRA implementation.