Carbon intensity and Risk Weighted Assets: Difference between pages

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''Sustainability - greenhouse gases - metrics.''
''Bank supervision - capital adequacy''.


Carbon intensity measures the greenhouse gas emissions of a process per unit of revenue earned by it.
(RWAs).


Risk Weighted Assets provide a measure of the total scale and risk of a regulated bank's activities, against which the bank is required to hold minimum levels of regulatory capital.


:<span style="color:#4B0082">'''''Absolute emissions still go up'''''</span>


:"Some [  ] countries have adopted carbon intensity targets, rather than absolute emissions targets, to accommodate their fast-growing economies. For example, China’s target is to reduce carbon intensity by more than 65 per cent by 2030, relative to 2005 levels. But that reduction in carbon intensity belies the fact that absolute emissions will rise even while that goal is met."
In simple terms, assets are multiplied by appropriate risk weightings - historically ranging from 0% to 100% depending on the level of risk - and aggregated.


:''Climate change A to Z - Financial Times.''
Other risks, including operational risk, are also appropriately evaluated and risk weighted, adding additional RWAs to the regulatory total.




== See also ==
The calculation of RWAs has been increasingly refined over time.


* [[Benchmarking]]
Risk weights may, in some cases, be derived from individual banks' own internal risk models, subject to the regulator's approval.
* [[Carbon]]
* [[Emissions]]
* [[Environmental concerns]]
* [[Environmental KPI]]
* [[Environmental Objective]]
* [[Environmental profit and loss]]
* [[Greenhouse gas]]
* [[Intensity]]
* [[Sustainability]]
* [[Weighted average carbon intensity]]  (WACI)


[[Category:The_business_context]]
Other risk weightings are determined on a standardised basis for all banks.
[[Category:Corporate_finance]]
 
[[Category:Investment]]
 
[[Category:Long_term_funding]]
==See also==
[[Category:Identify_and_assess_risks]]
*[[Bank supervision]]
[[Category:Manage_risks]]
*[[Capital]]
[[Category:Risk_frameworks]]
*[[Capital adequacy]]
[[Category:Risk_reporting]]
*[[CCF]]
*[[Off balance sheet risk]]
*[[Operational risk]]
*[[Pillar 1]]

Revision as of 16:12, 11 November 2016

Bank supervision - capital adequacy.

(RWAs).

Risk Weighted Assets provide a measure of the total scale and risk of a regulated bank's activities, against which the bank is required to hold minimum levels of regulatory capital.


In simple terms, assets are multiplied by appropriate risk weightings - historically ranging from 0% to 100% depending on the level of risk - and aggregated.

Other risks, including operational risk, are also appropriately evaluated and risk weighted, adding additional RWAs to the regulatory total.


The calculation of RWAs has been increasingly refined over time.

Risk weights may, in some cases, be derived from individual banks' own internal risk models, subject to the regulator's approval.

Other risk weightings are determined on a standardised basis for all banks.


See also