Banks that strove for Basel II advance compliance using scorecard risk models were looking for reductions in their minimum required capital. However, in the current economic climate they have found that their risk estimates have shot up and so have their capital requirements. These increases are partially due to flaws in Basel II, but they are also due to the nature of the models that were implemented.

Risk models can be put into one of three categories: through the cycle, point in time or mean reverting.

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