Under the Basel framework banks are required to conduct stress tests for their requirements of potential capital while considering the impact of stress testing scenarios. There could exist inter-linkages among macro- economic indicators and financial performance such that the stressed credit...

Retail Assets in Banks has grown due to the trend among banks to grow at a much faster space. Unlike the commercial exposures banks manage retail assets on pooled basis. In this paper, we discuss the methodology of creating pools of revolving retail assets. We compare the capital charges...

The growing relative size and increased volatility of retail portfolios areattracting increased attention from banks' risk managers and regulators.The correlation due to the defaults of retail assets over time has been ofconsiderable interest to retail bankers. Default correlation is...

The regulatory norms for provisioning of capital against Bank’s credit exposure include the application of risk mitigants to protect the overall losses for the Bank. Credit risk mitigation (CRM) includes approaches to mitigate the credit risk to which banks are exposed. However, the use of CRM...