5min chapter

Forward Guidance cover image

The Basel III Endgame: Bank Regulation In A Post-SVB World | Steven Kelly

Forward Guidance

CHAPTER

The Risk Weighted Model of Autonomous Vehicles

The two types of capital requirements, one is risk based and the other is non risk based. So a lot of credit products banks have to hold an enormous amount of capital against very risky loans because the regulars learned their lesson from 2008. However, in the risk weighted model, the autonomous fleets are the basically equivalent of risk free stuff like treasuries or agency mortgage back securities. The Fed was more willing to let the Corvette dealership say this is how risky Corvette is. And Barry wants to come in and standardize that where it's really not modelable or not reliable models anyways.

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