Against this background, our projection is for real GDP to decline further in 2009 to about 2 per cent. The slowdown will come both from the energy and non-energy sectors and could have some impact on employment, though any employment reduction is not expected to be major.
To deter banks on the IRB approach from taking undue advantage of the model-based approach to credit risk, Basel III has introduced a floor for risk-weighted assets. For banks under the standardised approach to risk-weighted assets, Basel III determines a more detailed risk weighting and lesser reliance on external credit ratings.