How to Determine Risk Weights for Sovereign Bonds

Risk weights are very tight towards countries and whether it's always D countries or not. I think what is the case is that many of these risk weights, they are low for asset classes that are deemed to be safe. The problem is that there can be divergences here and there can be things like maturity. But that should be dealt with on the market risk, on market risk. And some countries are more transparent about pillar two requirements and others are less transparent. They have pillar two requirements that they publish. For Basel three, we only had tier one and tier two after Basel three but then there was a pseudo-tier 3 because regulators decided to have high-quality capital

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