Risk Weighted Assets: Difference between revisions
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*[[Capital]] | *[[Capital]] | ||
*[[Capital adequacy]] | *[[Capital adequacy]] | ||
*[[CET1 ratio]] | |||
*[[Credit Conversion Factor]] | *[[Credit Conversion Factor]] | ||
*[[Off balance sheet risk]] | *[[Off balance sheet risk]] | ||
*[[Operational risk]] | *[[Operational risk]] | ||
*[[Pillar 1]] | *[[Pillar 1]] | ||
*[[Total capital ratio]] | |||
Revision as of 21:38, 20 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.
