the OTS is eliminated and thrifts will be regulated by other banking agencies. The OTS is being held responsible for several large bank failures such as Countrywide, Indymac and WaMu during the financ [..]

An estimate of the maximum amount that a given portfolio of financial assets is likely to lose over a specified period of time. Wrong-way-risk

Includes short term subordinated debt and undisclosed reserves and general loss reserves. Used to cover market risk, commodity risk and foreign risk exposure. Used to be included in the minimum capita [..]

Also called market risk, this risk is attributed to general fluctuations in the markets and in different economies. Unlike specific risk, systematic risk affects an entire business sector, perhaps eve [..]

this risk is specific to individual businesses. The risk elements usually affect a single specific business without spreading to the overall sector. These elements include poor company management, los [..]

the likelihood that a loan will not be repaid by its due date and fall into default. A PD is calculated for each counterparty at each exposure. The credit history of the counterparty and nature of the [..]

the weighting that represents the proportion of EAD that will be lost if default occurs. It is derived by taking account of any collateral or security that applies to the transaction/facility and the [..]

the incremental capital charge represents an estimate of the trading book’s overall exposure to certain risks over a one-year capital horizon at a 99.9 percent confidence level, taking into account th [..]

more commonly called rating agencies. Also called NRSROs – nationally recognized statistical rating organisation - in the U.S. Financial Stability Oversight Council (FSOC):

cash, central bank reserves (if they can drawn in time of stress), government bonds, high quality corporate bonds and covered bonds. These assets are fundamental, namely they carry low credit and mark [..]