Bankers with long memories may recall a capital-planning seminar organised by the British Bankers’ Association in 2006. Matthew Foss, a senior regulator at what was then called the UK Financial Services Authority, had some advice.
“We would recommend against using Basel II as a way of allocating capital internally for business decisions,” he said.
Instead, he urged his listeners to continue using their economic capital models to decide where to put money to work, instead of funnelling it to
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