IRB Approach for Corporate and Retail Exposures

Financial services professionals, consultants, and sales professionals interested in providing or selling products and services to banks and other financial institutions, and everyone interested in knowing about credit and operational risk exposure to banks and capital requirements to cover those risks in the light of Basel framework

Please contact us for information about prerequisites.

Expected Duration
60 minutes

One of the key goals of the Basel framework is to ensure that banks maintain a minimum level of capital at all times in order to cover their credit risk. Basel regulations propose a number of approaches for determining credit risk capital. Basel II, for instance, proposes an advanced and sophisticated approach called the internal ratings-based (IRB) approach for determining capital requirements for credit risk. This approach relies heavily upon a bank’s internal assessment of its counterparties and is subject to strict data, validation, and operational requirements. The IRB approach deals with various types of banking-book exposures, such as corporate and retail credits and borrowers, differently because of their unique underlying risk characteristics.
This course presents a high-level overview of the IRB approach for determining retail and corporate credit risk. Apart from providing an overview of Basel, and especially the IRB approach, it also discusses the IRB framework for retail and corporate exposures. The course also discusses risk weights and minimum requirements for these two types of exposures.


IRB Approach for Corporate Exposure

  • recognize characteristics of Basel IRB approaches
  • identify components of banking-book exposures
  • select corporate exposure practices
  • identify corporate exposure requirements
  • recognize characteristics of corporate exposure

IRB Approach for Retail Exposures

  • select components of retail exposure
  • identify aspects of retail exposure
  • recognize characteristics of the IRB approach for retail exposures





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