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Under Basel I, banks do not like lending to highly creditworthy companies and prefer to help them issue debt securities. Why is this? Explain why

  1. Under Basel I, banks do not like lending to highly creditworthy companies and prefer to help them issue debt securities. Why is this?
  2. Explain why the final stage in the Basel II calculations for credit risk (IRB), market risk and operational risk is to multiply by 12.5?
  3. Explain how the incremental risk charge is calculated. Why was it introduced by the Basel Committee?
  4. How are credit trades handled under the FRTB?

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