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 BIS home Monetary & financial stability Basel Committee on Banking Supervision Newsletters The IRB Use Test: Background and Implementation
September 2006Basel Committee newsletter No. 9
This paper is intended to provide background on the evolution of the Basel
Committee's thinking on the use test for IRB and clarify expectations for the
use of IRB components and risk estimates for internal purposes. It presents a
number of principles that are intended to support banks and supervisors in
interpreting the key use test provisions of the Basel II Framework. As these
principles focus on interpretation rather than expansion of the use test
requirements, they are expected to be consistent with guidance on the use test
that many jurisdictions have already formalised.
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