Investment banks used internal models to reduce the capital they needed to set aside.
FORBES: Regulatory Roulette: A Dangerous Loophole In The New Capital Requirement Rules
It has since retreated from that position and modified its internal models (ie, made them less optimistic).
When judging fair values, therefore, auditors will need to rely to some extent on companies' and banks' internal models and estimates.
This, most believe, is best achieved by using banks' own credit-risk models, much as their internal models are used to allocate capital in trading operations.
Where their internal models suggest that the capital required is lower than the 8%, banks have a strong incentive to convert these assets into tradable securities.
The country's biggest banks have their own internal models that try to link the amount of capital put against a loan to the creditworthiness of the borrower.
One method, pushed by the Americans, was to move towards using banks' internal models for allocating capital to credit risks just as they do for market risks on their trading books.
For two years, WhaleCo kept making small, minimum monthly payments, kept talking about when they were going to launch, kept sharing with us revised versions of their internal models for the relationship.
In its place, the banks were given the right to determine how much capital they needed to hold as a cushion against potential losses by calculating the value of their assets using their own internal models.
FORBES: Regulatory Roulette: A Dangerous Loophole In The New Capital Requirement Rules
Industry insiders report that prudent institutions were running internal valuation models even when market prices were clearly observable: those that were not had to scramble to develop such models when markets seized up, causing delays in proper disclosure.
ECONOMIST: An accounting standard comes under the microscope
And in this instance, the culprit (if that is the right word) is the permission that was given under so-called Basel ll to the biggest banks to use their own internal risk models to determine the riskiness of categories of loans and - by implication - the amount of capital they need to hold as a protection against the souring of those loans.
The principles also govern internal risk management models and regulatory capital models.
FORBES: Improving Risk Aggregation and Reporting Poses Major Challenges to Banks
Initial models will be parallel port and SCSI external drives, with internal EIDE and SCSI models to come in the first quarter of the new year.
Some models have internal memories that allow you to take up to 30 shots.
Sargent, in particular, was concerned with the internal consistency of economic models: the results had to follow, with unbroken logic, from first principles.
The suggested revision adds two ideas to the same basic regime: in deciding how much capital is needed, make greater use of, first, credit-rating agencies' measures of risk and, second, banks' internal risk-management models.
The first was internal: In an industry that spits out new models constantly, Motorola needed a way to keep pace.
The S3D application models the underlying turbulent combustion of fuels in an internal combustion engine.
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Her arias are models of compact expression, skillfully externalizing the very internal world of the story, particularly Mr. Parvin's distress.
Its goal is to map the complex network of signalling reactions which cells use as an internal messaging system, and then feed this information into other computational models.
Credited with developing a style of photography that seemed to reveal something private and internal about his famous subjects, Mr. Ritts earned the trust of his models.
"The four new OWC Mercury Extreme Pro SSD models give consumers the most affordable options for adding the pinnacle of internal drive performance to their Mac or PC, " said Larry O'Connor, CEO, Other World Computing.
ENGADGET: OWC debuts uber-capacious 480GB 2.5-inch Mercury Extreme Pro SSD
Remember, it was in the midst of Q4 that we thousands of Prius and other model owners lined up for brake and brake pedal repairs while executives explained internal memos about the need to delay publication of the discovered defects in these models at public hearings.
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