Credit risk management is a highly regulated discipline. Analysts, modelers, project managers, and individuals in various roles within the discipline are expected to have a knowhow of the Basel accords.
The Basel accord was formulated by the Basel Committee on Banking Supervision (BCBS). The accord is a set of recommendations for regulatory mechanisms in the banking world. While the accord isn't binding, major and emerging economies of the world have made their recommendations binding through their own legislative processes. In 1998, the Basel Committee first published a set of recommendations for the minimum capital requirements of banks. Initially, the G-10 countries enforced these recommendations as laws. These recommendations are known as Basel I. The recommendations are focused on credit risk and the risk-weighting of assets. One of the main takeaways was...