Ford, Guy; Sundmacher, Maike; Daly, Kevin James; … - Macquarie University; University of Western Sydney; … - 2005
capital diverges from the actual (economic) capital held by banks. A bank's actual capital is typically linked to a target … credit rating, which is in turn determined by the probability of default. If actual capital held by the bank is allocated … bank, rather than a disciplined and consistent analysis of risk based on the entire distribution of potential outcomes …