A-IRB banks, in contrast, tend to make such retail loans by using automated underwriting tools. Larger regional banks are more likely to compete directly with A-IRB banks, but for two good reasons we believe that Basel II will not affect these banks significantly.
First, today not regulatory capital but economic capital - the individual bank's management judgment about internal capital allocations for its own decisionmaking - drives loan pricing and origination decisions. Nothing in Basel II will change for the capital charges implied by economic capital.