OPINION: Memo to Oz-owned banks: resistance on IRB models is futile

Thu, 10 Oct 2019

The big four Australian-owned banks ought to have realised in February that it was futile to resist the Reserve Bank's intention to severely restrict the competitive advantage they gain from using their own internal models to calculate capital. Perhaps they thought the subject of IRB, or internal ratings-based, models is so technical and esoteric that the average New Zealander would never understand that the big four banks have enjoyed a significant cost advantage since 2008 when the models were introduced. Since then, the smaller, mostly...

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