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Basel II Framework and Tunisian Banking Regulations

The Basel II framework introduced new approaches for calculating weighted credit risk, including the Standardized Approach (SA) and the Internal Ratings-Based Approach (IRBA). These changes aim to provide a more accurate assessment of credit risk in banking.

Tunisian Banking Regulations: Adapting to International Standards

In Tunisia, banking regulations are adjusted annually to align with international standards issued by the Basel committees. The Central Bank of Tunisia issues circulars and standards to implement these changes.

Circular 08-2018: New Approach for Calculating Weighted Credit Risk

Circular 08-2018 introduced a new approach for calculating weighted credit risk, which involves multiplying risks by weights set according to asset type.

Weighting Values

The weighting values are as follows:

• 0%: non-risky assets (claims on the Central Bank of Tunisia, etc.)
• 20%: balance sheet commitments with low risk (loans to local and regional administrations, etc.)
• 50%: liabilities with moderate risk assets (housing loans, customs bonds, etc.)
• 100%: risky commitments generally to individuals

Credit Risk Management at BTE Bank

BTE Bank uses a scoring model as an essential tool for credit management. The model combines quantitative and qualitative components to classify borrowers according to their risk and choose the appropriate interest rate.

While this scoring model is an effective tool, further information on its specific implementation and effectiveness would be beneficial for a comprehensive understanding of BTE Bank’s credit risk management practices.