Risk Weights
Risk weights were based on what the parties to the Accord negotiated rather than on the actual risk of each asset
Risk weights did not flow from any particular insolvency probability standard, and were for the most part, arbitrary.
Risk weights did not flow from any particular insolvency probability standard, and were for the most part, arbitrary.
Operational and Other Risks
The requirements did not explicitly account for operating and other forms of risk that may also be important
Except for trading account activities, the capital standards did not account for hedging, diversification, and differences in risk management techniques.
Except for trading account activities, the capital standards did not account for hedging, diversification, and differences in risk management techniques.
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