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Bank Technology News, 1st November 2011: Will Basel III Kill Credit Models?

In addition to modifying credit risk models themselves, banks will need to invest time and technology into validating and back testing their model results, says Ioannis Akkizidis, senior financial risk analyst at Wolters Kluwer Financial Services.
"Regulators have said not all existing models are robust enough, so they propose to do stress testing of the input parameters to validate the results and also some back testing," he says. "They want to do stress tests on the quality and behavior of counterparties, especially the ones that are highly rated. Some of the changes in terms of validating the models are going to be redefined."

Read the full article here courtesy of Bank Technology News »