Consider a commercial bank with the following portfolio of loans:

Debtor	Amount
OECD banks (A rated)	$100 million
Private Oil firms (AAA rated)	$100 million
Private car firms (BBB rated)	$100 million
OECD central governments (BBB rated)	$100 million
2-year loan commitment to OECD bank (BBB rated) drawn amount of 40%	$100 million

Required

1. Calculate the credit risk capital requirement for the bank under the standardized approach in Basel II
2. Comment on the possible shortcomings of the standardized approach and discuss how the credit risk capital requirement could be computed if the bank could create its own credit risk model (IRB approach) to quantify the risk of its portfolio of loans