Credit Risk Asia

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Managing and measuring credit risk management is no longer the same, thanks to the Global Financial Crisis with the fall of Lehman Brothers, Merrill Lynch and the rest of the financial institutions that never thought they would. As an aftermath of the crisis,  the Basel Committee announced new yet stringent rules on bank's capital requirement and risk capture. With most Asian banks are just settling in after the implementation of Basel II, the process of moving from Basel II to Basel III will not be easy for them.

When Basel III was announced a year ago, many market observers played down the impact of the new ruling on Asian banks. Basel III requires banks to hold top-quality capital totalling 7 per cent of their risk-bearing assets compared to current requirement of 2 per cent. It  is significantly lower than what banks had feared plus it comes with the comfort of a longer time frame for implementation. However growing concerns has been voiced out across Asia notably on computing counterparty credit risk, credit valuation adjustment and liquidity risk management.