The more a bank makes use of its risk rating system, the more confidence supervisors are likely to have in the results of the banks’ assessments of their capital needs. Data requirements and validation Clearly, a system is only as good as the inputs that go into it. Accordingly, banks using the IRB approach will need to be able to measure the key statistical drivers of credit risk. The minimum Basel operational standards provide banks with the flexibility to rely on data based either on internal experience or generated by an external source, as long as the bank can demonstrate the relevance of the external data to its own exposures. Regardless of source, sound data are critical for formulating meaningful internal risk assessments. From a broader risk management perspective, access to high quality data will enable a bank to evaluate the performance of its internal rating and risk estimation systems in a consistent and meaningful manner. The Basel standards outline the data history banks will need to use the IRB approach. The Committee recognizes that banks may not currently have all of the required information on hand. For this reason we have continued to engage market participants in a dialogue on this issue. As implementation of the New Accord approaches, we encourage banks to consider their data needs very seriously and to comprehend fully the techniques they will need to use to derive appropriate estimates of loss based on those data.
Jessica Chew Cheng Lian: Advancing environmental goals through sustainable finance initiatives in Malaysia Speech by Ms Jessica Chew Cheng Lian, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Launch of "Nature Nurtured/Pameran Lestari Alam" Exhibition, Kuala Lumpur, 19 January 2017. * * * Malaysia attracts millions of tourists each year, many who come for the beautiful and unique attractions that nature has to offer in our country. Today, we celebrate this through art, and by bringing art and nature together, we hope to draw more attention to both. This exhibition, ‘Nature Nurtured’, continues Bank Negara Malaysia’s efforts to preserve our natural heritage, and follows closely on the heels of steps that we took in 2016 to restore the natural habitat of the grounds in Shah Alam where the Bank’s brand new Automated Cash Centre now stands. The region’s natural treasures have been a magnet for merchants and travelers for centuries. Spices were what brought the European powers to Southeast Asia six hundred years ago, while the Chinese came in search of fine food and medicine. Almost exactly 200 years ago, General Farquhar, the Resident of Malacca, commissioned a team of artists to paint every aspect of the Peninsula’s wildlife. Efforts to document nature through art had, however, existed long before. I should mention that women, too, counted among the talented observers of life forms who went on to capture nature in vivid artistic creations that have informed and inspired generations.