Basel II has influenced credit economy discussions like no other topic in recent days. Making capital requirements more adequate — the main goal of Basel II — has a major impact on both the credit branch as well as the economy as a whole.
These capital requirements have been introduced to German law by changing the German Banking Act (KWG) and by introducing the German Solvency Regulation (SolvV)
Starting January 1st, 2008 all credit institutions and financial service providers in possession of a banking license are bound to determine their credit risk by using the standard approach (KSA) or by basing it on the internal rating approach (IRBA). The increasing price erosion which also affects the financial market many institutes are forced to make use of the IRB approach, mostly because — contrary to KSA which uses predetermined risk weightings and credit ratings of renowned rating agencies — internal estimations of certain risk parameters can be used to account for pricing-related leverage effects.
EBI Basel II
S&N supports the specific Basel II requirements of object financing institutes with function, reporting, and analyzation modules: This consists of the determination of asset classes, filtering and rating of securities, the EAD determination, the calculation of operative risk, the execution of stress tests, or the implementation of a loss database as a basis for estimations of PD, CC, and LGD. It also includes supplying established registration systems using standard interfaces.