We have reviewed the details of another key section of the final Basel Accord: changes to the internal-ratings based (IRB) approach and a new output floor designed to limit reliance on models.  Combined with the revised standardized approach (SA) we assessed earlier for you, the IRB framework provides a still more favorable regime for residential-mortgage finance. That said and as before with the SA, the U.S. has to want to do what Basel says – nothing in the new standards forces the U.S. either to walk away from the IRB, as it may well do, or make mortgage capital any easier (which it won’t).  

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