The Default Risk Charge (DRC) Is Intended to Capture Jump-To-Default

question 89

True/False

The Default Risk Charge (DRC) is intended to capture jump-to-default risk and is calibrated to the credit risk treatment in the banking book to reduce potential discrepancy in capital requirements for similar risk exposures across the banking and trading books.

---

Definitions:

Snide Comments

Sarcastic or mocking remarks meant to insult or undermine someone.

Strong Feelings

Intense emotions that are passionately or deeply experienced, often influencing behavior and thought processes.

Conflict Metaphors

Figurative language used to describe or conceptualize conflict, often framing it in terms of war, games, or natural disasters.

Volcano

A geological formation that occurs when magma from within the Earth's mantle escapes to the surface, often causing eruptions.