Topic: Within the current context, what is your view on the use of advanced internal models by financial institutions to calculate regulatory capital?
Potential Ideas to consider in the essay:
• What are the benefits for institutions of having internal models to calculate regulatory capital requirements?
• In what ways regulatory models can benefit usual management practices?
• Is too burdensome to keep internal models nowadays?
• What are the challenges faced by internal models in the current environment?
• Would institutions be better-off calculating regulatory capital under standardised approaches?
Assessment: It is expected that the alumni provide a critic view on the topic of the essay. Originality of ideas and well-reasoned judgments (i.e., there are no ‘good’ or ‘bad’ arguments) will prevail over mainly descriptive statements.
Additional elements to value the essay:
• Structure and organization of the essay. The structure responds to the requirements above and all the ideas are clearly linked across the essay
• The essay is well drafted and technical vocabulary isused in a proper way
• If references are used, they are properly quoted