In general, any change in the SA framework should be clearly limited to those areas where it has become clear, after a thorough assessment, that the SA framework underestimates risk.
We highly appreciate the statement that the objective is not to increase overall capital requirements, however the values of the parameters and factors proposed decisively point in the direction of a significant capital increase.
The review should allow sufficient time for a meaningful calibration that is not based on a one-off QIS exercise, for which the submission of data not readily available could be difficult and/or partial. In addition, also the phasing in of such an extensive and far reaching proposal, in terms of impacts and implication, should be adequately planned, in order to avoid undue and unintended destabilisation of the financial system.
Increased risk sensitivity can produce an improvement if the risks are accurately measured. Therefore, for a SA revision on the model of the one proposed to be successful, it would require not only a global framework in which the best performing risk drivers (based on empirical evidence) are selected, but also a calibration of risk weights per jurisdiction, within a clear set of calibration rules.
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