Where there are multiple methods for determining capital requirements, outcomes should not vary substantially between methods Related to the previous principle, the Reserve Bank considers that if internal models are used to determine capital requirements alongside Standardised approaches, the calibration of the two should not result in unduly different outcomes. Standardised approaches can be seen as a default treatment for risk measurement.
If Internal Model banks are able to use relevant data and risk management systems to better understand and measure the risks in their business, capital requirements might vary from the Standardised approach. However, the degree of difference should depend on the value added by Internal models over and above that achieved under the Standardised approach.