IRA Releases Report -- "Basel II by the Numbers 2005"

March 13, 2006

Institutional Risk Analytics, a designer of customized financial analysis and valuation tools for risk managers, credit officers, auditors, corporate lenders, regulators and other financial decision makers, will publish a report on March 15, 2006 based upon calculations from the IRA Bank Monitor, "Basel II By the Numbers 2005," including economic capital measures and Basel II credit benchmarks for US bank and thrift holding companies with assets greater than $10 billion.

Copies of the report are available now under embargo. Please contact us if you would like a copy of the report. Some highlights:

"In contrast to the fourth Quantitative Impact Study (“QIS”) sponsored by US regulators, the fully-stressed economic capital measures presented below suggest that the largest US banks should be required to hold more capital under Basel II than under current minimum capital requirements. Activities such as trading, derivatives and investments appear to be the dominant factor supporting this view."

"Conversely, medium and smaller financial institutions included in this analysis, which were not part of the QIS survey, appear to require levels of economic capital significantly below current minimum levels of regulatory risk based capital. This observation appears to be tied to the abnormally low levels of loan defaults observed throughout the banking industry over the past five years."

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