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Create The Best Profile Images For Press and Media
Learn How to Create The Best Profile Photographs For Distributing to Press and Media Members, For Inclusion in Press Kits and to Publish At Social Networks
This article has especially been written considering designers, architects and artists on mind, but of course could relate to anybody. The article discusses how to create the best profile photographs for distributing to press and media members, for inclusion in press kits and to publish at social networks. The profile image creation is especially very important for your face-brand.So what is your face brand is and how much does it worth? Your face is unique, your face represents you, and therefore your face is your bio-logo. Your face is the representation of your identity, and your brand, and it has a natural value that you can use or improve. This value is your face-brand. For example, consider the faces of movie actors, their face brand is so high that companies would pay millions of dollars to feature them in their ads or movies. For politicians, face-brand means more votes, and for designers, face-brand is more mentions, more designs sold.Face-brands are owned by designers, artists, architects, movie stars, singers, politicians, and any other important person who is known by the society. It is up to you to improve the value of your face-brand, and to improve it you must have a good profile image. A good profile photograph is the key to success and the source of your face-brand. It must be professional, but more importantly, it must be correct.The best profile image is a bust. The bust image is the representation of the upper part of the human figure, depicting a person's head and neck, as well as a variable portion of the chest and shoulders. The bust profile images are usually most successful and remarkable during communication and therefore are widely preferred by the press members.Therefore to ensure that your face-brand would spread further, you must use a bust image. The bust image is also mandatory for many platforms. Full-body images are not suitable for face-brand creation and therefore should be avoided. However, full-body images could sometimes be useful in order to market teams rather individuals. Yet, further solutions still do exist. Golden rules of a good bust profile image is as follows: 1. High-Contrast. 2. Grayscale Compatibility. 3. Good Positioning. 4. Non-filtered, Non-altered. 5. White Background, 6. Accessory Usage. 7. Scale, 8. Sharp, 9. Smile. 10. Updated, 11. Attire. If you use and follow these rules and suggestions, your profile image will work great and help you achieve a face-brand that you could use.Your profile image must have high-contrast. Meaning that you and the background must have a good contrast through selection and use of contrast - opposite colors; if the background is white, you should wear dark colors, if background is black, you should wear light colors. The contrast is especially important to ensure that you look healthier and your image is more visible and sharp looking.Furthermore, your image must be grayscale compatible. When your photo is converted to black and white or grayscale, your image must be still good looking after the conversion, this is possible by having a high-contrast and bright initial image. If your photograph has similar colors, after the grayscale conversion it will not be good looking and therefore not appealing.When taking the photo shots, your head should preferably be centered on canvas. Furthermore, there should be slight margins and paddings on the image to ensure that editors could slightly edit or cut the image based on their preferences. Thus, the image should depict not just the bust, but a bit zoom-out version of the bust so that the right bust-image could be cropped. After creating bust photographs and images, some people like to have their visuals extensively edited and altered using image processing programs. While in some cases, image enhancement might be useful, extensive and over-image enhancement makes your image fake looking, not trustable and perhaps repulsive. Do not use filters or after effects; try to have natural looking photographs as much as possible. Yet still, you can still use limited amount of image editing to improve image quality, contrast, brightness, sharpness and for occasional covering of spots or photography errors and particles. Using a white-background is especially important for your profile images. Using a white-background helps press to easily embed your images to their articles, thus increasing the chances your profile images would be used. Furthermore, color photographs with white backgrounds can be easily converted into grayscale images and they usually provide higher-contrast ratios which is preferred by press and media members.Accessory usage, such as glasses, hats and others could also be important for your profile image. However, for an effective look it is best to ensure that your face is fully visible. While glasses are widely accepted as an item to provide positive decoration of the face even though they decrease face visibility, hats are not as desired since they cloak a great portion of the body, including hairs. Extensive jewelry is also not suggested.The scale of the image is important. Preferably, the profile images must be high-resolution no matter what. This means that your image should be suitable for printing in large sizes, such as cover images of magazines. To have higher-resolution images, it is best to take bust shots instead of cropping the face from full body shots which decreases the resolution. Take photos with a high-resolution, professional photo-camera with right focus.Having a good focus is important. Blurred profile images, pixelated head shots are useless in any condition. The best way to ensure that your image would be sharp and well-focused is to work with a professional photographer. Like your logo, having a profile image is important and takes time and efforts. Remember to wear high-contrast before going to photographer; use fabric that creates contrast with your skin color.Another important element of your photo shot is the confident smile and look. For a professional image, do not make crazy faces, political signs or super-serious unhappy mimics. Having a smile on your photo, is almost always positive. When having your photographs taken, listen to photographer or otherwise try to look slightly right above the camera to ensure a better head posture. Ensure that your photographs are updated. Do not send photographs that are over 5 years of age. Especially if you are a young designer, you should most preferably submit your latest photos. Photos taken years ago have the following issues: They are outdated for the attire, hair-style, accessories and furthermore they are usually less advanced technically since image capturing technologies improve every year. Finally, your attire is very important. Try to have a respectful image. Being formal is usually safe, try to look modern and contemporary in the images by wearing costumes that are simple yet elegant. For your profile image, try to have your best modern look. Stay away from sports costumes, informal clothing. For designers, the traditional black look is quite okay and widely accepted. For man, wearing a jacket looks good. A photography session for having your profile image taken can take up to an hour. Before going to a photographer, try to wear high-contrast and take some extra clothes with you. If you are a women, have the make-up applied. If you are man, have your hair styled. Furthermore, ensure that your photographer will give you all rights to your photo and permit unlimited usage of your photograph in any medium. Ensure your photographs are not rotated right, left or upside-down (Some programs could auto rotate your digital images). When submitting to artistic magazines, it is best to have grayscale images. Ensure your photograph are not scaled-up. (Some photo-cameras use digital scaling to save high-resolution images, however these result in pixelated images instead.). The most preferred format is Jpeg, remember to save your images as high-quality jpeg files.This article tried to cover how to have a good profile image. To remind you once more, your profile image is your face-brand; it has value that you can improve and use. Having the face-brand allows you privileges in locations that you are known, helps you to meet more people and get featured even more. Book a studio meeting with your photographer, or have your photographer friend take your shots. Exerpt:This article has especially been written considering designers, architects and artists on mind, but of course could relate to anybody. The article discusses how to create the best profile photographs for distributing to press and media members, for inclusion in press kits and to publish at social networks. The profile image creation is especially very important for your face-brand.So what is your face brand is and how much does it worth? Your face is unique, your face represents you, and therefo..
Create The Best Profile Images For Press and Media Images:
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Visibility Near Zero
Meteorologist Sally Severson tracks rain and fog
Dense fog in place over southern Wisconsin with visibility close to zero in many locations. Dense Fog Advisories until noon for Sheboygan, Dodge, Jefferson, Fond du Lac and Washington counties. However, we can't stress enough foggy weather is in place almost everywhere this morning. Low beams and extra stopping distance traveling today.
Drizzle persists through the morning and the fog will be patchy much of the afternoon as well. Mild highs near 50 today. It's likely we'll see fog develop again tonight as lows stay in the 40s on light winds.
Saturday brings a mostly cloudy sky with morning highs in the upper 40s. A cold front will push through late morning and temperatures will fall to the mid 30s by late afternoon. A few flurries are possible later Saturday night and early Sunday.

subset: commoncrawl


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Schmidt reacts to erroneous health care news
Video shows local Republican rejoicing to false report
A video showing Rep. Jean Schmidt reacting to erroneous news about the health care law being struck down has gone viral.
Both CNN and Fox News initially reported Thursday morning that the Supreme Court had overturned portions of the Affordable Care Act, when in fact the individual mandate had been upheld.
An onlooker recorded cell phone video of Schmidt, a Miami Township Republican who had campaigned against the legislation, as the congresswoman learned – incorrectly -- of the court's decision.
"Yes, yes," Schmidt exclaims, pumping her fist. "What else? They took it away."
Schmidt clutches her fist to her forehead, overcome with emotion.
It's not clear when Schmidt learned that a 5-4 majority upheld President Barack Obama's health care reform law, but she issued a statement later that day.
"I'm disappointed by the Supreme Court ruling," Schmidt said in a statement. "Two years ago, when the Democrats who then controlled the House passed the so-called Affordable Care Act, they were adamant that it wasn't a tax. President Obama was adamant that it wasn't a tax. Now, the Supreme Court says it's a tax. Regardless of how it's labeled, the law should be repealed."
Schmidt, who had served in Congress since 2005, lost her March primary bid against Republican Brad Wenstrup.


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Just wanted to say that my usurper/LORD server is still up and running!
Connect using telnet://lyvan.mine.nu, or your favorite telnet client!
Do note that in order to play LORD correctly, you'll need to use another client instead of the windows built-in one, I'd recommend Mtelnet, found here, http://bbsing.info/mTelnet/
Version info:
Usurper v0.20e NEW mode.
LORD v4.06
Looking for a server to play at? Look here!
Usurper, game for Local Play, BBS, Intranet or Internet
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New Member
- Dec 27, 2010
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I didn't want to highjack 281pony's thread so I started this one. Wow, this forum has me second guessing myself now! I knew I was going to be laid off again this winter so I bought an 87 gt this last fall to give me something to do this winter. So far I have bought all this to build a 418 stroker when I was just building something to just play around with: c-9 block, a set of c-3 yates heads with matching intake, eagle forged crank and rods, diamond 36 dish pistons, jesel roller rockers, Isky 714" roller cam and I'm not even close to being done. The engine is at the machine shop now. I'm wanting to go with a c-4 trans, but the way funds are looking, the T-5 is staying for awhile. It has an 8.8 with 4.10's. I got a really good deal on the heads, which are only 40cc's, this why I have had to go the route of the diamond 36 dish pistons. I should be around 10.5-1 compression. I am not wanting a race car, just a fun street car. Please feel free to voice your opinions on what some of you guys would do.


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Frozen Morning - Windermere, Lake District, Cumbria
Windermere is the largest natural lake in England. It is a ribbon lake formed in a glacial trough after the retreat of ice at the start of the current interglacial period.
Into the water - Derwent Water, Lake District
Long expo at Derwent Water, near Keswick in Lake District, Cumbria, England. The lake occupies part of Borrowdale and lies immediately south of the town of Keswick. It is both fed and drained by the River Derwent. Derwentwater is a place of great scenery. It is surrounded by hills (called fells), and many of the slopes facing Derwentwater are heavily wooded. Derwent means River with oak trees. The lake is believed to be the last remaining native habitat of the vendace fish. It was also the shooting location for Star Wars Episode VII: The Force Awakens for the scene "Approach to Maz Kantana's Castle, Takodana".
Rolling Mist - Ambleside, Lake District
Our winter trip to the English Lake District turned out be a winter wonderland. It doesn't usually snow a lot in the Lake District, but this year was different. It snowed all night and by morning Lake Windermere transformed into this surreal scene with snow covered peaks and trees with mist rolling in from all directions, it was almost magical.
Last Light - Borrowdale, Lake District
A just in time shot to capture the last light in Borrowdale. The background is lit by the orange light from the setting sun and the foreground is in shadow. Also one of my recent sun star attempts which turned out pretty good. The Canon 16-35 F/2.8 Mk III produces the finest sun stars I have seen and is sharp as hell. It is quickly becoming my favourite landscape lens.
Sun and Moon - Buttermere, Lake District
A shot just before sunset taken opposite Lake Buttermere. The last rays of the winter sun still hit the peak as the moon rose exactly behind the peak on the right. This stream which acts as a leading line flows down the fell (mountain) and joins Buttermere.
Buttermere is a lake in the Lake District located in the county of Cumbria. Buttermere means "the lake by the dairy pastures" (from the Old English "butere mere"), conveying the fertile nature of the flat alluvial land at both ends of the lake.
Ashness Bridge - Lake District
A longish exposure to smoothen the water. The low winter sun is casts a warm light on the mountain in the background, while the foreground is in shadow adding contrast to the scene.
Originally built as a packhorse bridge, Ashness Bridge is a traditional stone bridge on the single-track road from the Borrowdale to Watendlath, in the Lake District.
Split! - Buttermere, Lake District
A shot of the hills surrounding Lake Buttermere at sunset. The last rays from the setting winter sun were still hit the peak just as the moon rose from behind the peak on the right. The foreground is in shadows while the the background is lit which in my opinion adds contrast and depth to this image. Buttermere is one of the most photographed locations in the Lake District and its always difficult to find a unique perspective so I was delighted to come across this scene.
BlackForest! - Grasmere, Lake District
This picture reminds me of a BlackForest cake with black woods at the bottom and red mountains on the top. Taken during our climb up Loughrigg Fell, the foreground was in shadow giving character to these already dark woods while the setting winter sun cast a deep orange light on the snowy mountains in the background. The water body is the Grasmere Lake and in the background you can see the small village of Grasmere in the valley just below the mountains.
Now that's a pretty damn brilliant location.
Golden Pier - Derwent Water, Lake District
Long expo at Derwent Water as the sun set at my back. Derwent Water occupies part of Borrowdale and lies south of the town of Keswick. Derwentwater is a place of great scenery and filled with photographic opportunities. It is surrounded by hills (called fells locally), the slopes are heavily wooded with oak trees. The lake is believed to be the last remaining native habitat of the vendace fish. It was also the shooting location for Star Wars Episode VII: The Force Awakens for the scene "Approach to Maz Kantana's Castle, Takodana".
Spotlight! - Rydal Water, Lake District
I took this shot just before the climb up Loughrigg Fell. We decided to climb up to the Loughrigg Fell summit for sunset. There were a lot of clouds to the west and I wasn't hopeful for much of a sunset. As we started our climb from Rydal Water, the clouds broke just enough so that the low winter sun could cast a stream of light across the landscape creating this scene. It was quite windy so I decide on long exposure to smooth out the water.
Can you spot the Boat? - Derwent Water
We were out shooting at Ashness Bridge when we noticed a tourist sign for a place just up the hill called "Surprise View". Now, when a place has a name like surprise view, you have to check it out. Glad we did, as we were pleasantly surprised by the view. It is a very small opening in the woodland through which you can see the entire Derwent Water lake and the town of Keswick.
Embracing the cold - Windermere, Lake District
A high-key portrait. Unexpected heavy snowfall in the lake district messed with our photography plans but provided an opportunity for some portraits. The snow and haze provided a great opportunity to do some portrait shots. Travel portraits are the best!
Winter Sundown - Loughrigg Fell, Lake District
A shot taken from Loughrigg Fell during the last light on a winter's day as the sun sets down behind me casting a brilliant pink glow on the snowy peaks in front. Loughrigg Fell is a hill in the central part of the English Lake District. It stands on the end of the long ridge coming down from High Raise over Silver How towards Ambleside.
Light and Shade! - Derwent Water, Lake District
A shot of Derwent Water as seen from Surprise View in Borrowdale. You can see the small town of Keswick in the distance. Now thats an amazing location for a town, huge lake on one side and towering peaks on the other. I really like how the low winter sun was casting long shadows and caused some parts of the scene to be in shadow while casting a subtle orange glow on others.
The winter calm! - Windermere, Lake District
A long exposure of lake Windermere taken from Ambleside just after the heavy december snow. The water was quite still as there was almost no wind. The only thing disturbing the reflections was the ocassional ferry which absolutely destroyed reflections for a good 5 - 7 minutes. Getting this shot was a game of patience and timing to try and get a long exposure after the water had calmed down from the previous ferry and before the next one came into the scene. Long exposure really helped bring out those reflections and removed distraction caused by ripples in the water.
Burning Clouds! - Loughrigg Fell, Lake District
A blended exposure from 3 shot AEB. The sun went behind the clouds just for a few minutes lighting the cloud on fire. I took 3 exposures because of the high contrast in the scene.
This shot was taken during the climb to the Loughrigg Fell summit.


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With LC to ST termination, this high-quality fiber optic patch cable is specifically designed for Ethernet, multimedia, or communication applications. The small LC connector takes half the size of traditional SC and ST fiber connectors, since it offers twice the port density of conventional SC and ST connectors to satisfy the need for higher port density in telecom closets, equipment rooms, and work areas.The LC connector's RJ-style latch clip design gives each connection greater durability in resisting snagging, pulls, strains and impacts during cabling installs and maintenance. Plus, it is easy to engage and disengage with the "telephone jack style" release mechanism. The ST connector features a bayonet locking system.The patented injection molding process provides each connection greater durability in resisting pulls, strains and impacts from cabling installs.Each cable is 100% optically inspected and tested for insertion loss before you receive it. A pull-proof jacket design surrounds the popular 62.5/125 multimode fiber, immune to electrical interference.
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Funds will help monitor <i>enterococcus</i> bacteria in water along the Texas coast
The U.S. Environmental Protection Agency (EPA) has awarded $379,140 to the Texas General Land Office (GLO) to monitor enterococcus bacteria levels in waters along the Texas coast.
Enterococcus bacteria, which thrive in waters contaminated by storm or sewage runoff, will be monitored by GLO's Texas Beach Watch program. Utilizing grants appropriated by Congress in the Beaches Environmental Assessment and Coastal Health (BEACH) Act of 2000, the Texas Beach Watch program will work in conjunction with EPA to monitor pathogen indicators at all high-use beaches in the state. The program will also be required to notify the public in the event these pathogen indicators are in excess of EPA-recommended criteria.


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A local church is hosting the large group that planned to tackle nearly 20 projects this week at job sites in Shelby, Bessemer City, Gastonia and Charlotte.
Donna Blanton�s cookware has been pulling double duty for more than a year. When rain falls, she scatters pots throughout her house to catch what seeps through the ceiling.
Blanton and her husband, Teddy, haven�t been able to afford a new roof. They�ve gotten used to the routine and the brown stains on the ceiling.
But the Blantons� unpleasant routine was interrupted this week when a mission team, Mission Serve, from rolled into town. Team members hail from as close as Polkville and as far away as six other states.
The couple should have a new roof on their home by the end of the week.
Mission Serve
About 230 teenagers and adults arrived in the area Sunday.
A local church is hosting the large group that planned to tackle nearly 20 projects this week at job sites in Shelby, Bessemer City, Gastonia and Charlotte.
Most of the volunteers are teenagers who recently returned from a Mission Serve trip of their own to Alabama.
Each morning the group gets up and heads out to the work site by 7:30 a.m. They work until 4 p.m. before heading back to Catawba Heights in Mount Holly to clean up, eat dinner and join in devotions.
It�s a pretty hectic schedule, but there are a few hours of free time at the end of the day.
�People think we�re crazy sometimes, spending money to be on a roof or painting or whatever the job is,� said Emily Andrews who�s from Baltimore.
Nineteen projects
Thirteen church groups comprise the mass gathering of volunteers.
Most of the 19 planned projects are replacing roofs, but the volunteers also paint and do other home repairs.
Kids involved with Mission Serve are in middle or high school or college.
Andrews is on her ninth trip this year. Now in college, she started volunteering when she was 11.
She said she likes getting her hands dirty for a good cause.
�I love being on the roof,� Andrews said. �It�s just the love for God and serving others.�
Callie Glover works for Mission Serve as administrative project specialist.
She also started with the organization as a teenage volunteer. Now she spends her summers bouncing around to different projects.
Glover was in Canada last week and will be in Knoxville, Tenn., next week.
Going without
The Blantons were thrilled when they learned Mission Serve was coming to help them at their Bessemer City home.
Donna Blanton had asked for assistance through a local aid program, but she was placed on a waiting list because the local group had such a long list of people to help.
Finances have been a struggle for the Blantons for three years, ever since Donna Blanton was injured on the job. They now live on one income.
Their air conditioning went out two years ago. They haven�t been able to replace it.
Blanton said she and her husband have been willing to help people in need. But since becoming the people in need, it�s been a struggle.
�Most of the time I just go without or do it myself,� Blanton said. �We just do with what we�ve got.�
Blanton said things are looking up.
She recently got approved to receive disability, and now she�ll have a new roof.
�It�s a lot of stress off of me,� she said. �I know the more the rain comes, the more chance there is for mold.�
Each morning, Blanton puts iced drinks out for the kids, and she cooks hot dogs for them for lunch, something homeowners aren�t required to do.
She said it�s the least she can do.
With tears in her eyes, Blanton called the volunteers a godsend.
Reach Diane Turbyfill at 704-869-1817.
Need help?
Mission Serve has its projects already in place for the summer.
For information about how to get assistance in the future, call 888-421-4408 or look online at mission-serve.com.


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Zanteogo wrote:IronDuke wrote:Zanteogo wrote:My jaded prediction:
This game ends up releaseing as a
water downedwatered-down version of its self with one or two mildly interesting features.
Tue Mar 21, 2017 1:40 am
Re: Pine
Automation engineer, lateral thinker, soldier, addicted to music, books and gaming.
Nothing to see here
Nothing to see here
Flatfingers wrote: 23.01.2017: "Show me the smoldering corpse of Perfectionist Josh"


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Teased at the recent Comic-Con International, StarWars.com presented today the cover art. Karen Traviss's e-novella, A Practical Man, comes out next month from Del Rey.
View Larger
Here's what Traviss had to say about the book during a publishing panel at Comic-Con International:
"Why did the Mandalorians side with the Yuuzhan Vong? What were they thinking? They're not stupid, they had to have their reasons, and that was the gap I wanted to fill. It's actually not what it seems. And the title, A Practical Man, is a reference to an obscure song that I'm not very sure few people would have heard in the UK. It's about sticking to what you believe."
The cover artist is Steven D. Anderson; the illustration is based on a recent publicity still.


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The Fire announced on Wednesday that midfielder Julio Martinez has been released from the club.
Martinez, who was signed in January, made three league appearances for the Fire, starting twice and registering one goal. The 24-year-old Salvadoran winger was brought to Chicago on a loan from Mexican second division squad Club Leon.
"We always thought that Julio was going to be an impact player for the team, and it just wasn't working out," Fire technical director Frank Klopas told MLSsoccer.com.
Prior to his time in Chicago, Martinez grew close to Fire head coach Carlos de los Cobos while playing under him when both were with the Salvadoran national team.
"It was very difficult for me to make this decision because I knew him very well and had the opportunity to coach him in the past with the national team in El Salvador," de los Cobos said. "I have strong feelings towards him, but now it is time to take decisions out of what is best for the team."
De los Cobos cited Martinez's poor performance and lack of physicality as reasons for his release.
"His performance wasn't what I expected," de los Cobos said. "What I was expecting from Julio was better performance and a more decisive attitude on the field. This is a league that the physical aspect of the game is really dominant, and given the position that Julio played, it was going to be hard for him to give what I needed."
When asked why this signing was made in the first place, Klopas and de los Cobos each talked about their initial belief that Martinez would be a quality MLS player.
"He's got good qualities," Klopas said. "But who knows? Maybe some people don't adjust. You go to different countries people don't adjust well, to different leagues, for whatever reason it just wasn't working out. But it's better to make those decisions and move forward instead of waiting for the end of the season and not get what you're able to from a different player."
And move forward is exactly what the Fire will do.
Klopas said that the club will bring in a new player to replace Martinez during the summer transfer window. Some possible signings include 28-year-old American midfielder Jeremiah White and 30-year-old Serbian midfielder Bratislav Ristic. Both players have been on trial with the club, with Ristic having been in camp for the better part of the last two weeks. White has been with the Fire since last Tuesday.
"We're still looking at some guys," Klopas said. "Obviously you know the guys are in camp are this guy Ristic and Jeremiah White … Ristic is a fast player, he's an experienced player, he's a very good soccer player and [White] is someone with a lot of pace. In the short time that I've seen, I think both players can bring something to the team."
One player who the Fire won't be signing is French midfielder Malaury Martin. The former French youth international's trial with the Fire came to a close on Friday, and Klopas said that the club has no plans to bring him in over the summer.


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South African Journal of Economic and Management Sciences
On-line version ISSN 2222-3436
Print version ISSN 1015-8812
S. Afr. j. econ. manag. sci. vol.14 n.2 Pretoria Jan. 2011
The effect of stressed economic conditions on credit risk in Basel II
Ja'nel EsterhuysenI; Gary van VuurenII; Paul StygerII
IAbsa Capital: Investment Bank Division of Absa Bank and School of Economics, North-Wet University
IISchool ofEconomics, North-West University
The robustness of the Basel II accord in protecting banks during volatile economic periods has been challenged during the ongoing credit crisis. In particular, advanced approaches to measuring and managing credit risk have drawn criticism for being both irrelevant and too complex. Despite accusations that the accord was largely responsible for the crisis, this article explores which of Basel Il's credit risk approaches were more successful in allocating capital. It was found that, in general, compliance with Basel II actually protected banks during the crisis, with simpler approaches enjoying greater success than more advanced ones in protecting banks against credit risk.
Keywords: credit risk, loss and frequency distributions, credit crisis, Basel II
1 Introduction
The global financial crisis, which began in June 2007, has been described as the most serious financial crisis since the Great Depression of the 1930s (Soros, 2008). It resulted in considerable international distress, with almost all major banks experiencing capital shortages, and some defaulting outright. Among the principal causes was an explosive increase, by a factor of ten in some cases, in credit defaults, (Subramanian, 2009) precipitated by lax lending standards, which had prevailed for several preceding years. An early victim, Northern Rock, a medium-sized UK bank, requested security from the Bank of England after its highly leveraged balance sheet led to investor panic and a bank run in mid- September 2007. Although the plea was initially unsuccessful, the UK government did eventually relent and the bank, the first of many, was taken into public hands in February 2008 (Subramanian, 2009). Northern Rock's problems proved to be an early indication of the troubles that would soon beset other banks and financial institutions. Those initially affected, such as Northern Rock and Countrywide Financial, were directly involved in mortgage-lending and residential home construction, and short-term financing through increasingly illiquid credit markets became a virtual impossibility (Allen & Bali, 2007). Over 100 mortgage lenders worldwide went bankrupt during 2007 and 2008, and concerns that the large investment bank Bear Stearns would collapse in March 2008 resulted in its 'fire-sale' to JP Morgan Chase. The credit crisis reached its peak during the months of September and October 2008 (Allen & Bali, 2007). Global stock markets were slower to react: substantial losses were recorded throughout the early part of 2009, until the nadir was reached in mid-March of that year. The crisis caused the failure of several major institutions, which were subsequently acquired under duress): many of these were subject to takeover by their relevant sovereigns, including, amongst others, Lehman Brothers, Merrill Lynch, Fannie Mae, Freddie Mac and American International Group, AIG.
Catastrophic failures of inadequate capital allocation and management were exposed, and culpability for the cause, severity and duration of the crisis was placed on, inter alia, regulatory bodies, credit rating agencies and bank CEOs. Financial institutions began to question the validity and relevance of the underlying credit-risk principles forming the basis of the Basel II Accord (Basel II) issued by the Basel Committee on Banking Supervision (BCBS) in 2005 (BCBS, 2006a). These principles were devised to provide banks and other financial institutions, like insurance companies, with methods for managing credit risk adequately by providing guidance for assessing credit risk, including equations for determining risk capital for more advanced approaches. Because many institutions' capital levels proved woefully inadequate during the crisis, these principles are inevitably now being challenged (Colander, Follmer & Haas, 2009:2). However, during December 2009, the BCBS approved for consultation a package of proposals for strengthening global capital and liquidity regulations with the goal of promoting a more resilient banking sector, which would form part of its response to addressing the lessons learned from the crisis and to strengthen the Basel II framework (BCBS, 2009).
Basel II provides two different approaches for the measurement and management of credit risk; the Standardised Approach (the simplest, hereafter referred to as the SA) and the Internal Ratings Based (IRB) approach. The IRB approach is divided into two further approaches of increasing complexity: the Foundation (FIRB) and the Advanced (AIRB) approaches. For the purpose of this study, both will be referred to collectively as the 'Advanced Approaches' (AA). The AA employs complex mathematical formulations, which are now under attack (Collander et al., 2009:2). This is because the AA allows banks to use their own internal models to assess credit risk and risk-sensitive capital adequacy levels. Many such models are mathematically complex and may be incapable of modelling the 'exceptional times' (a generic shortcoming of all mathematical models) experienced by the financial world during the credit crisis. It has been posited that financial engineers were aware of the unrealistic restrictions and severe limitations imposed on the models to ensure stability, but embraced them anyway. The fragility and unreliability of these models under stressed conditions has surprised many (Collander et al., 2009:2), although the severity, duration and contagion effect of the crisis admittedly did not seem feasible (Subramanian, 2009:3) and was thus not explicitly modelled prior to the eruption of the crisis.
Banks were perceived as being adequately capitalised prior to the credit crisis (Collander et al., 2009:2), and, by Basel II standards, this was certainly true despite the ensuing market mayhem, which revealed inadequate capitalisation. For example, Lehman Brothers , Merrill Lynch , Fannie Mae , Freddie Mac , American International Group and JP Morgan were regarded as being among the top 30 largest and most capitalised financial institutions in the world (Subramanian, 2009:3). The majority of banks referred to in this article had already been approved for the AIRB approach or were in the process of applying for it under Basel II (see Section 2). The question arises: Was Basel Il's simpler approach to credit risk successful in guarding banks against credit risk catastrophes1 (through the adequate provision of buffer capital), or did Basel II's advanced credit risk approach succeed in protecting banks from disaster. This article addresses these questions by comparing bank credit-risk losses determined by using the Basel II Standardised approach to losses with losses incurred when the Basel II advanced approaches were used prior to and during2 the crisis. The question of whether or not the sophisticated mathematical approaches to the measurement and management of credit risk used in advanced approaches were more successful than the simpler approaches will be discussed.
The remainder of this paper is arranged as follows: Section 2 provides a brief literature study of the Basel II advanced credit risk approaches along with a brief overview of the major credit risk losses experienced during the crisis. A description of the data employed in the study is presented in Section 3 and the subsequent analysis of these data follows in Section 4. Section 5 concludes the paper.
2 Literature review
Basel II relies heavily on a number of key elements, which now appear to have weakened in light of the credit and liquidity crisis (Griffin, 2008:2). Firstly, Basel II promotes the use of complex internal quantitative modelling techniques by banks for the calculation of regulatory capital (Griffin, 2008:3) and there are concerns about the opacity of these models. Secondly, the new capital adequacy rules depend heavily on the research produced by credit-rating agencies. Given the culpability ascribed by many to the rating agencies in the structured credit market turmoil, should Basel II really give these agencies a quasi-regulatory role in relation to capital adequacy and counterparty credit risk assessment? Thirdly, despite improvements on Basel I, the new rules continue to focus on credit origination, rather than on new credit derivative instruments and structured products. Fourthly, the IMF recently stated that the pro-cyclical nature of Basel II capital requirements, which require banks to hold additional capital against greater anticipated losses as the economic cycle turns downward, could exacerbate an economic recession by forcing banks to restrict their provision of credit in a downturn scenario (Repullo & Suarez, 2008)3. Lastly, the credit crunch was partly the result of a widespread lack of information, which exacerbated the initial US sub-prime problems.
While enhanced disclosure is one of the three pillars forming the basis of Basel II, it is recognised as the weakest in terms of both prescription and enforcement (Griffin, 2008:4). Basel II disclosure is required for external parties like Credit Rating Agencies (CRAs) and regulators to assess an individual bank's capital adequacy levels in order to provide the bank with some guidance. However, this disclosure was, in most cases, insufficient, which led to the inadequate assessment of capital by external parties and in turn to inadequate guidance on capital adequacy levels. Banks' capital bases could therefore not protect them against the systematic effects of the crisis. These capital levels and their disclosure should be aligned more with the way in which banks assess credit risk (Griffin, 2008:5).
Although it is not the focus of this paper, a summary of the different Basel II approaches can be seen in Figure 1, which highlights the major differences between these approachesand provides a good background for the remainder of this paper .
As can be seen in Figure 1, the SA applies only prescribed (by the Regulator) risk-weights and uses very little credit-risk mitigation; the use of models is almost completely absent. The AA, on the other hand, applies more specific risk measures, for example Probability of Defaults (PDs), Loss Given Default (LGD) and Exposure on Default (EAD), and all these measures are based on comprehensive and complex mathematical models. With the FIRB, LGD and EAD and maturity (M) are prescribed, but with the AIRB, the bank is allowed to use its own models to calculate all the components and in essence has much more freedom when it comes to calculating risk capital.
The implementation of Basel II coincides with the considerable losses reported by some of the world's largest banks (Figure 2), requiring large-scale recapitalisations (Benink & Kaufman, 2008:2). The risk models underlying Basel II are similar to those employed by many banks (and indeed, the former may have influenced the latter). It is widely known that many models are prone to considerable weakness on account of unrealistic assumptions. Recent events have challenged the usefulness of the important elements in Basel II, as the need to recapitalise banks has revealed that many banks' internal models for both assessing credit risk and calculating risk capital performed poorly in underestimating the risk exposure (Benink &Kaufman, 2008:2). This reflects some of the difficulties of accounting for low-probability/ high-impact events.
Most critics of Basel II do not oppose the accord in its entirety, but are more critical of the somewhat arbitrary 'scientific precision' imposed by the advanced approaches (Diamond & Rajan, 2009:1). For example, in the European Union (EU), Basel II requires banks and other financial institutions to apply an EU-formulated 'Risk Assessment Model' at the end of each day's trading to demonstrate solvency. If solvency cannot be established, authorities are informed and the bank ceases trading. This does not pose much of a problem in a rising market (Diamond & Rajan, 2009:2). In a highly volatile or falling market, however, this could prove catastrophic, not least because the model fails to take into account inevitable changes in market sentiment. In addition, the short-term impact of new information is factored in, regardless of its accuracy or inaccuracy. Most models also ignore underlying asset worth (Diamond & Rajan, 2009:2). In the UK, both Northern Rock and Bradford and Bingley fell foul of Basel II. Both banks were in the process of applying the Basel II advanced approach (Diamond & Rajan, 2009:2).
Cannata and Quagliariello (2009:9) were among the first to criticise the assessment of credit under the advanced approaches, which rely on complex models and ratings derived from external credit rating agencies (ECRAs). The assessment of borrowers' creditworthiness provided by ECRAs is a significant aspect of the models used for assessing credit risk in the advanced approaches and there are definite doubts as to the quality and reliability of their inputs into these models (Cannata & Quagliariello, 2009:9). The degree of independence of the rating agencies' judgement is also of major concern, which is particularly true in the case of securitisations and structured products (Zingales, 2008:12). While the 'issuer-pays' model applies to all the products, including corporate bonds, rated by these ECRAs the standard conflict of interest may be more acute for structured finance ratings, as ECRAs sometimes discuss the rating implications of particular structures during the structuring process. These conflicts are exacerbated when ECRAs also sell consulting services to entities that purchase ratings.4
Table 1 highlights the major UK banks using the advanced approaches and their sovereign support provided. Table 2 highlights the European countries that had to receive sovereign support, and also illustrates the percentage of their banks using the advanced approaches. It is clear that the majority of the banks that received support were those already using the advanced approach.
Another criticism focuses on rating methodologies that play a role in the risk assessment of models under the advanced approaches. The assignment of a rating is subject to many challenges. For instance, for complex financial instruments the limitations of statistical models have become even more evident, as such products are often illiquid and, in certain market conditions, they do not have a market price (Zingales, 2008:12). In addition, the shortcomings of models based on external ratings are clear, and the need to identify possible solutions is unarguable. However, it is quite difficult at this stage to imagine plausible alternatives to the involvement of rating agencies in the assessment of credit quality. Further criticism is levelled at the lack of adequate and accurate data: historical data on the performance of US sub prime loans, for example, was confined largely to a benign economic environment with rising house prices (Cannata & Quagliariello 2009:9). The lack of sufficient historical data or of scenario analysis that adequately assessed how particular asset pools would respond to potential economic scenarios led to errors in ratings. In particular, ECRAs underestimated the spike in correlations in the defaults that would occur during a broad market downturn (Cannata & Quagliariello, 2009:9).
Table 1 shows the four largest banks in the UK, which received sovereign support of over £30 billion in total. This support was chiefly to absorb the considerable credit losses that had occurred since the start of the economic crisis. Table 2 illustrates the main European countries that provided sovereign support to local banks and also lists the percentage of banks which employed the AIRB approach for credit risk. It is interesting to note that, for almost all of the major European and UK banks, 85 per cent of sovereign support was provided to banks using the AIRB approach for assessing credit risk. This indicates significant shortcomings in the AIRB approach for assessing credit risk and for estimating credit risk capital. Benink and Kaufman (2008) argue that this could be due to a key, albeit incorrect, assumption that banks' internal models for measuring risk exposures are superior to any other. The AA implies perverse incentives that induce banks to underestimate their exposure to risk.6 Onado (2008) disagrees that the market is more efficient than regulatory authorities in the detection of adequate capital levels and rejects the assumptions that banks, because of their operational expertise, are able to assess risks and their optimal capital requirements.
Furthermore, supervisors may also be partly to blame for the inadequacy of some banks' own internal credit assessment and capital calculation models, as they were required to assess and examine the robustness of these models before the bank was allowed to use them for regulatory purposes (Benink & Kaufmann, 2008:3). This is because the assessment process was clearly new to both the banks and the supervisory authorities, requiring a gradual learning-by-doing. However, neither party had given itself enough time to really understand the ability of these models to measure, for example, rare but extremely dangerous events. In other words, regulators should have given themselves more time to assess and examine the banks' internal models before allowing them to use these for regulatory purposes. This points to the possible failure of one aspect of the Basel II advanced approaches, rather than to the entire philosophy of Basel II (Benink & Kaufmann, 2008:3).
The incentives offered by Basel II in terms of lower capital requirements are justified only if the AIRB approach models for calculating capital and assessing credit risk are both sound and prudent (Onado, 2008). In certain countries, validation standards may have not always been sufficiently rigorous and some banks may have underestimated the importance of developing strong risk management and audit functions (Onado, 2008). An anonymous risk manager (The Economist, 2008:12) stated that:
[a]t the root of it all, was and still is, a deeply ingrained flaw in the credit decision making process. In contrast to the law, where two sides make an equal-and-opposite argument and is fairly judged, in banks there is always a bias towards one side of the argument. The business line was more focused on getting a transaction approved than on identifying the risk in what it was proposing. Often in meetings our gut reactions as the risk managers were negative, but it was difficult to come up with hard-and-fast arguments for why you should decline a transaction, especially when you were sitting opposite a team that had worked for weeks on the proposal. In the end, with pressure for earnings and a calm market environment, we reluctantly agreed to marginal transactions.
Another criticism of banks' advanced risk assessment methods is that they would privilege the use of standardised and quantitative information, neglecting the soft information that is a key driver in the bank-customer relationship (Cannata & Quagliariello, 2009:9). This problem should not be underestimated: complex rating methodologies developed by banks for the Basel II AIRB approach focus too often on quantitative data, disregarding the enormous amount of qualitative information on borrowers, which cannot easily be incorporated into statistical and mathematical models. A more widespread use of quantitative techniques for measuring and assessing credit risk also tends to make the relationship between banks and firms more transparent.
It is worthwhile explaining the major differences between the Basel II standardised and advanced approaches (Figure 1). Basel II makes use of two approaches to credit risk, including the Standardised Approach (SA) and the Internal Ratings Based (IRB) approach, which is further subdivided into the Foundation IRB (FIRB) and the Advanced IRB (AIRB)7 (Styger & Vosloo, 2005:10). With the SA, banks may not use any internal models. This approach is similar to that of Basel I, in which each exposure is assigned a risk weight based on the characteristics of the specific loan (Styger & Vosloo, 2005:10). A corporate borrower's credit quality is reflected by its external rating as assigned by an external rating agency, and, if there is no external rating, the loan's risk is generally weighted by 100 per cent (us under Basel I) and a retail exposure (individual) is generally weighted at 75 per cent (Styger & Vosloo, 2005:11). However, lending that is fully secured by mortgages on residential property that is (or will be) occupied by the borrower, or that is rented, may be risk weighted at 35 per cent (Styger & Vosloo, 2005:11). This approach is fairly uncomplicated and differs substantially from the advanced approaches.
Both the FIRB and AIRB approaches are based on risk components, which include Probability of Default (PD), Loss Given Default (LGD) and Exposure at Default (EAD). All these are based on estimates calculated using mathematical/statistical models that employ the bank's own default history to determine these estimates (Styger & Vosloo, 2005:12). A corporate or individual borrower's credit quality is assessed according to the product of the above three estimates, where PD is the possibility (as a percentage) that the borrower will default, EAD is the exposure of the bank at the time of borrower default and LGD measures the actual loss after all losses have been realised, including legal fees (if any) (Styger & Vosloo, 2005:12). Table 3 provides a summary of the differences between the FIRB and AIRB approaches.
The Basel II AIRB approach relies heavily on calculations from models, in most cases complex and technical, that employ banks' past default history. It is these estimates that are under the spotlight as potential causes of the credit crisis. Banks have been accused of neither possessing nor employing adequate loss history on which to base their models, as well as not adequately stress-testing these models to assess the possibilities of extreme losses, such as those experienced in the crisis. In some cases financial engineers involved in model construction simply did not comprehend the true characteristics of rapidly changing markets.
In order to test the truth or falsehood of the above accusations, the next section evaluates credit losses experienced by global banks using (a) the SA and (b) the AA to assess credit risk prior to and during the crisis. This evaluation will assist in the determination of the more successful approach in the assessment of (and hence mitigation of) credit risk. The analysis proceeds via the construction of severity and frequency distributions for both sets of data before and during the credit crisis.
3 Credit loss distributions and data
The BCBS classification of the credit risk loss severity distribution is shown in Figure 3. Expected losses should be covered by pricing and provisioning; unexpected losses require regulatory credit risk capital. Basel II requires the credit risk capital charge to target unexpected losses and capture tail events (BII 2009:3) at the 99.9th percentile. Banks must either insure or face the consequences of losses beyond this percentile.
The choice of July 2007 as the start of the credit crisis was justified in part by the firstarticle, which mentions the credit crisis by name (Moneyweek, 2007), but also by subsequent analysis, which has shown that severe signs of weakness were evident and becoming manifest by late July 2007 (Daily Kos, 2009). The credit-risk loss data were procured from eight international retail banks through Standard and Poor's LossStats®Database, four of which apply the SA, while the other four apply the AA for assessing credit risk. Only minor problems were experienced with the data, as the database from which these were sourced provided more than enough data points in order to perform an adequate analysis. However, all losses less than ZAR100, 000 were excluded, which reduced the data pool quite significantly.
BEFORE THE CRISIS: Benign from an economic point of view, the 4.5-year period from January 2003 to June 2007 was characterised by low interest rates, low inflation, relatively new bank regulations regarding operational risk, explosive growth of credit and other derivatives, considerable loan securitisations, a huge demand for commodities such as oil and metals from India and China and low unemployment.
DURING THE CRISIS: The turbulent two-year period from July 2007 to the present (June 2009), that is, from the onset of the credit crisis and characterised by almost non-existent interest rates, hugely diminished stock markets, increasing taxes, a severe regulatory environment for, inter alia banks, regulators and rating agencies and rising unemployment.
High-level loss characteristics are sumarised in Table 4 and a comparison is made between the average number of losses for the banks as well as the value using the SA and AA before and during the crisis.
The average severity of credit losses increases for banks using both the SA (+13 per cent) and the AA (+162 per cent) from before to during the crisis (also see Table 4). The average frequency of losses also increases for both the SA (+40 per cent) and the AA (+57 per cent).
4 Analysis
Figure 5 shows the frequency and severity of bank credit losses for banks using the SA. The onset of the credit crisis is indicated by a dashed line.
The average frequency of credit losses for banks using the SA in Figure 5(a) increases, which can be seen in Figure 4 as well, where the average number of losses per year also shows an increase from 331 to 465 losses per year (40 per cent increase). However, there is very little movement in the severity of these losses before and during the crisis, as illustrated by Figure 4 and Figure 5(b). In summary, Figure 4 illustrates that, although the average frequency has increased, the average severity has not increased by the same magnitude.
However, the same cannot be said for the credit losses for banks using the AA, as illustrated in Figures 6(a) and (b). Figure 6(a) clearly indicates that there has been a significant increase in the average number of credit losses experienced during the crisis, which is further illustrated in Figure 4, in which the average number of losses per year increased from 230 to 362, a 58 per cent increase.
Frequency distributions of loss events measured as events per month, for banks using the SA before and during the crisis are shown in Figures 7(a) and (b) respectively. These show many similarities - a concentration of low-severity losses and a few large outliers, or tail events. The inter-arrival time of loss events for banks using the SA, also measured before and during the crisis, are shown in Figures 8(a) and (b) respectively. Before the crisis, the loss events were evenly distributed, the majority of them occurring between 10 to 15 days of each other. During the crisis the distribution becomes bimodal, with prominent peaks in the five and 10 day categories. Both Figures 7(a) and (b) and Figures 8(a) and (b) again illustrate that the frequency of losses for banks using the SA showed an increase during the crisis.
The frequency distribution of loss events, measured as events per month, for banks using the AA before and during the crisis, is shown in Figures 9(a) and (b) respectively. Both these show a concentration of lowseverity losses. Figure 9(b), however, shows significant increases in the number of outliers, that is, tail events, indicating an increase in severity. The inter-arrival time of loss events for banks using the AA, also measured before and during the crisis, are shown in Figures 10(a) and (b) respectively. Before the crisis, the loss events were evenly distributed, the majority occurring within 10 to 20 days of each other. During the crisis, the distribution becomes bimodal, with prominent peaks in the five and 10-day categories. Figures 9(a) and (b), and Figures 10(a) and (b), illustrate that both the frequency and the severity of losses for banks using the AA increased during the crisis.
In summary, although most banks experienced an increase in the number and value of credit losses, the Basel II approaches did protect banks during the financial crisis. However, it can clearly be seen that the SA was much more successful than the AA. This was because, although the frequency of losses increased for banks suing the SA, the severity remained relatively the same. However, the same cannot be said for banks using the AA, as the frequency increased but the losses also became much more severe, which was not the case with the SA.
In Table 5 above, three different 'fitting techniques' were used to determine which distribution best fitted the data. A ranking was allotted to each. This means that the distribution with the lowest ranking of the three techniques best fitted the data. This technique helps to determine which distribution is best to use for modelling a severity and frequency distribution to a specific dataset. This paper has found that the General Extreme Value Distribution best fits the frequency distribution, while the Frechet Distribution best fits the severity distribution. Although the Gamma Distribution and the General Pareto Distribution also fit the data well, as indicated in Table 5, the authors decided to use the above distributions, as their previous distributions were carried out via these and they have shown the required accuracy and reliability. It is recommended that future research use the other distribution approaches. The above added value to the outcome of this study, as it assisted the authors in identifying the best approach to use in transforming the data into meaningful results.
5 Conclusion
Since the start of the economic crisis in July Since the start of the economic crisis in July 2007, numerous banks have written down substantial credit losses, and in many cases have failed completely. Criticism has been levelled at, inter alia, Basel II's methods of measuring credit risk: it is widely believed that the complex advanced approaches are too complex, and that they introduce perverse incentives to banks, permit 'capital allocation arbitrage' and encourage lax lending standards. This paper investigated the soundness of the Basel II approaches to assessing, measuring and managing credit risk during two very different periods of market stability - before and during the ongoing credit crisis. Whether the methods were satisfactory in assigning adequate capital fell outside the scope of this paper; attention was instead focussed on the methods of assessing credit risk.
The literature research and investigation conducted for this paper found that most of these methods of assessing credit risk under the advanced approaches were based on complex mathematical and statistical principles. However, it was not the principles that were being challenged but the suitability of the methods for 'adapting' to extreme market conditions. Some of the possible reasons discussed in this paper for the failure of these advanced methods include the lack of adequate 'stressed' data and over-reliance on external parties, for example, rating agencies and auditing firms, who themselves were reliant on mathematical and statistical data to provide guidance to banks8. In addition, the financial engineers responsible for model construction were mathematically competent but economically naive, unable to comprehend the impact and the knock-on effects of extreme market conditions and the inadequate time allowed between model construction and testing and model implementation by banks. Furthermore, the ability of these models to adjust in very volatile markets and the signing-off by regulators of internal models and methods who themselves did not always understand the model machinations can also be seen as possible reasons for the failure of these advanced methods.
To assess whether the methods employed under the SA were more successful than those employed under the AA, data were sourced from eight international retail banks (four using the SA and four using the AA approach). The frequency and severity distributions of credit losses from these banks were produced and analysed. For banks using the SA, the average frequency increased from before to during the crisis. However, the average severity remained stable, with only a slight increase in the average value. For banks using the AA, the average frequency and average severity increased from before to during the crisis, which means that not only did the average number of events increase, but they also became much more severe.
The implication is that, although several market participants were eager to blame Basel II for the financial crisis, it can be said that, in most cases, compliance with the Basel II accord actually protected banks during the economic crisis. The SA enjoyed greater success than the AA: the main reason for the failure of the AA resided in the complex methods on which it relied to assess credit risk.
Many banks, while continuing to meet the minimum requirements of Basel I, had already reviewed their credit standards in order to make them consistent with the incoming Basel II discipline (and ultimately being Basel II AA complaint). It is therefore likely that some banks, in an attempt to transform well-established credit processes and risk management methods may have misjudged the actual exposures to new risk types or new manifestations of traditional risks. This does not imply that the new framework should be discarded, but rather that it confirms the need for the 'testing' phase of the new rules to be more rigorous. Furthermore, regarding simplified supervisory tools, such as the 'leverage ratio', which are becoming increasingly popular, the authors believe that these are likely to raise the same problems as those posed by Basel I, for instance, the low sensitivity to risk. While it cannot exclude the fact that such tools could be used as a complement to Basel II, especially during periods of stress, when internal models are not fully reliable, the authors are sceptical of the idea that they could serve as a complete substitute for a risk-sensitive regulation.
The solution may not lie in drafting new rules under Basel III, but possibly in less of a reliance on complex mathematical and statistical models when assessing credit risk, along with more focus on experience and client knowledge.
1 These catastrophes could include large credit losses or a liquidity shortage / mismatch, which could bring about a bank's failure. Central banks were excluded from the focus of this paper since they do not have to comply with Basel II.
2 It is the subject of some debate as to the initial event that triggered the 'credit crisis'. See section 2 for a more detailed discussion of and qualifying arguments for the author's choice of mid-2007. Furthermore, since the time of writing (January 2010) and despite some evidence of 'green shoots of recovery', the crisis is arguably far from over. Lending practices remain severely curtailed, stock markets are still below their pre-crisis highs, most economies remain in the grip of recession and many banks continue to be supported by their sovereigns.
3 Discussion document presented at the IMF's ninth annual Jacques Polak Research Conference in Washington, November 2008.
4 Zingales (2008:1) pointed out that it is a mistake to think that the significant power attributed to these new mechanisms to these institutions would not have affected the independence of their judgment, because, as power corrupts, absolute power corrupts absolutely. Rating agencies are no exception to this rule.
5 Barclays Bank never received sovereign support, but this is the amount that was raised internally to prevent collapse and is therefore included here.
6 Basel II creates perverse incentives to underestimate credit risk. Because banks are allowed to use their own internal models for assessing risk and determining the amount of regulatory capital, they may be tempted to be overoptimistic about their risk exposure in order to minimize required regulatory capital (Benink & Kaufman, 2008:2).
7 As both these approaches are considered much more advanced than the SA, they are both considered in this paper as being 'advance' (AA).
8 This paper by no means implies that rating agencies or audit firms were to blame for the failure of the advanced approaches, but more that banks and other financial institutions were too reliant on their input and did not use enough internal resources to build and test these methodologies.
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Accepted September 2010


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For weeks now we had been hearing about how this team was getting close. After every lose you would hear players and head coach Jay Triano talking about it. There would be a lot of talk about how few practices this team had under Triano. It honestly sounded like a party line to explain the failure. Jay Triano a couple games ago would call a time out and the team came out and did not follow his advice. He quickly called another time out and gave his team a quick and firm message after which he walked away. Chris Bosh would follow that up with his own form of verbal abuse. The Raptors seem to have got the message. One of my points had been I did not see any emotion from anyone and that this team seemed to accepting and to easy to find excuses. Well in the last two games when this team had some really legit excuses in that they had no Jermaine O'Neal or Jose Calderon they would play well with no excuses required. O'Neal and Calderon may not even go on this mini two game road trip to Milwaukee and Washington. But after wins over Houston and Orlando maybe it will not matter as much as we would have thought a few days ago.
I seriously would have bet my house the Raptors would have gone 0-3 for this homestand and sit at 12-22. But instead they have a couple unexpected wins and sit 14-20 and have moved out last place to 3rd in the Atlantic Division. The Raptors have done it by playing with a lot more effort and energy on both ends of the floor. Triano has got this team running more on offense and playing harder on defense. The win over Houston did not impress me personally as I chalked it up to Houston looking bad as much as the Raptors looking good. The win over Orlando I walked away stunned and impressed. The Magic came into Toronto on a serious roll and had won 9 of their last 10 games. I have been very impressed with them this season and think they have been over looked in favour of the Celtics and Cavs. Once is an accident and twice is a trend. So if the Raptors can follow up with a win tonight over the improving Bucks we may just have something. Until the year 2009 came around the Raptors lacked a quality win on their resume. These type of wins get a lot of talk in college basketball. When teams are trying to get into the NCAA tournament one of the things people look at is quality wins and toughness of schedule. The Raptors had the tough schedule but no quality wins to speak of. Now to start 2009 they have back to back quality wins. When all hope was starting to fade in this fan base, the Raptors have given life to the flame of hope in Raptorland.
B.C On The Mic
When Bryan Colangelo does an interview everyone stops and listens. It is like those old investment advertisements for E.F Hutton. When the guy would speak in the ad the entire room would go silent to hear what he had to say. I get that feeling for ever Bryan Colangelo interview. He talked about a number of issues in his halftime interview on CBC. There were lots of interesting things said and lots of lines to read between. Colangelo seemed to down play what expectations they had for this team at the start of the season. He said the the goal was just to advance further into the second round. The question was asked about being expected to be contenders in the east that prompted this response. Colangelo is truly great at spin and staying on message. He would make an excellent political candidate or advisor/spokesman for one some day. Maybe he could run the Barkley Campaign in Alabama in 2014. Although with Charles recent issues that would be tough to spin but if anyone could do it B.C would. In case you have been living under a rock of late, Barkley had been picked up for DUI and was on his way according to him to have some "fun" in his SUV with a woman that was not his wife. But back to Bryan and what he had to say about the Raptors.
The topic of Carlos Delfino came up. Colangelo stated the fact that the Raptors indeed still have his restricted free agent rights. He seemed to suggest that he did not get the impression that Carlos would be coming back to the league as fast as others have suggested. Although if you are a hockey fan you will recall how easy it is to break a contract with a Russian Team. The labour rules in Russia only require you give two weeks notice same as if you managed the Moscow McDonalds. So these things can change quickly. Colangelo did say the Raptors would be interested in having him back and suggested the Raptors would match any offers that came his way be it next year or this season. He did seem to suggest he felt it would be next year as opposed to this year. So for those of you that think Defino could make a difference you should be happy to learn about that.
What would a Bryan Colangelo interview be without some talk about Andrea Bargnani. He talked about how Andrea had been shifted around playing at different positions. Which I would like to point out was greatly encouraged by Bryan at the start of the year. He would go on to talk about him being young and growing and learning. It was pretty much your standard Andrea Bargnani defense speech. It sure did not seem like a man that was read to trade Bargnani anytime soon. Bargnani has been playing out of his mind since replacing J.O in the starting line-up. The question wasn't asked that I would like to know. Which is what happens when J.O is healthy? Will Andrea end up back on the bench despite all of this and J.O just return to starting line-up. The one thing that is true if teams are calling for Bargnani and Bryan would consider moving him he has reason to play hardball now with the recent performance of Bargnani. I got no such impression from Colangelo that he is all that interested in moving Andrea. However being the smart guy that Bryan Colangelo is, that is likely exactly what he wanted me to think as well as every other G.M in the league.
Speaking of that idea. Bryan talked about all the rumours that include his name that seem to be in almost every city in the NBA these days. He suggested that it is people speculating and seeing blood in the water after a slow start for a team that had higher expectations. He said although he is active in looking to improve this team that there are lots of factors that go into making trades happen. He was in no means looking like a guy who was in a rush or panic to get something done. When asked directly if he would consider trading Chris Bosh the answer was a flat no followed by a detailed explanation. When he was asked about the fact that Bosh could leave in 2010 he talked about it being his job to convince Bosh to stay and he was going to work to build the team into something that Chris will want to be a part of. When he was asked if it was accurate that the only players he would not consider moving were Chris Bosh and Jose Calderon he did not answer that question in a direct way and it makes you wonder why. He answered the question about Bosh directly why not Calderon? There was a rumour that Steve Nash could be moved for Calderon in a package to the Suns. Nash in talking about being a free agent in 2010 did express a desire to play in both New York and Toronto as well as returning to the Suns.
Roko Ukic did look very good yesterday. Steve Nash has had back issues in recent days and is getting to the point he may not have many years left. But if you think Roko could end up being a started down the line it might make sense. There has been quiet talk that Nash is not happy with the system under new coach Terry Porter. It would be a bold move for sure if Colangelo was able to make that kind of trade. Jay Triano and Steve Nash have a great relationship and he would fit in quickly in Toronto you would have to think. But Colangelo was not talking about any of this kind of speculation. Honestly that is what is as well. But it should be noted how well the Raptors defense has looked without Jose Calderon in the game over the last 7 quarters of basketball. I am not thinking that is an accident.
Just like all Bryan Colangelo interviews it was interesting and he did not say a lot but he gave hints and lots of lines to read between. Sometimes the things he does not say are just as important as the ones he does say. The one thing that has been clear since the firing of Sam Mitchell is that the spotlight is firmly on Bryan Colangelo and what his next move will be. That is one thing that was not talked about was the coaching position. It is safe to assume that Colangelo is still comfortable with giving Jay Triano the rest of the season to audition himself for being a candidate for the job.
Can The Raps Continue To Roll In Milwaukee?
The last time the Raptors won 3 games in a row the team they beat was the Milwaukee Bucks. It was at the start of the season when the Raptors had stormed out to that 3-0 start. The last of those wins was against Milwaukee. The Raptors would go on to lose to the Pistons after that and it would be the last time and only time this team has won 3 in a row all year. If the Raptors are serious about getting back in the playoff race they will need to put together winning streaks and longer ones than just 3 games. The Bucks have shown signs of improvement lately.
The 16-19 Bucks have managed to go 9-5 at home so far this year. One of those 5 loses as mentioned to the Raptors. They have had a real balanced approach with 6 players averaging double figure scoring and none of them over 20 points. Michael Redd leading the way with 19.4 per game. If Andrea Bargnani is a bust as a number one pick what does that make Andrew Bogut? He has not lit the world on fire with his play for the Bucks in his career. But this season averaging a respectable double double of 11.5 points and 10.5 rebounds. There is also Charlie Villianueva the former Raptor who is averaging 12.3 points and 6.4 rebounds. The Bucks made a big trade for Richard Jefferson and I think they were hoping for more than 17 a game from him. But that is what they are getting. The Bucks also let Mo Williams go to the Cleveland Cavs and he has been having a great year playing with Lebron.
The reason that they let Williams walk was the up and coming talent of Ramon Sessions. He is paired with Luke Ridnour as the PG combo for the Bucks. The other player that they are excited about in Milwaukee or they should be is this guy:
Not saying that Luc Mah A Moute is going to be a household name. It doesn't roll of the tongue as easy as James or Jordan. He is not going to be those guys by any stretch of the imagination. What he is though is an exciting young player that seems to add a spark to the Bucks and can grow into being a solid role player in this league.
Despite having yesterday off the Bucks are playing their 3rd game in 4 nights. They enter this game coming off a disappointing loss to the Bobcats in the road end of a home and home set that they won the front end in Milwaukee on Friday. The Bobcats took advantage of the fact the Bucks were without Andrew Bogut who missed the game and is listed as day to day with back spasms. Raptors with no Jermaine O'Neal would still have a massive size advantage on the Bucks without Bogut in the line-up. The Raptors just need to understand despite a couple wins they have long given up the right to overlook anyone. If they every do the rest of the season if I was the coach I would pop on a DVD of the Thunder game just to make my point.
So the Raptor will look to make it 3 in a row and this is a rare Raptors T.V affair from Milwaukee on a Monday. So if you are not a Raps T.V subscriber your welcome to see what happens here in the Raptor Rewind. It may be possible I may end up live blogging this game. If it happens check back and I will have a link for you to that. Raptors Rolling? I know it just seems to strange but it is the most recent reality in a wacky season.
Raptors Doing More With Less?
Posted by Unknown at 6:51 AM
2 comments:
- AnonymousJanuary 5, 2009 at 7:13 PM
Nash plays no better D than JoseReplyDelete
That may be true but he is also a 2 time M.V.P. He would offer the Raptors a huge marketing chance. He still is a productive player and at a high level. But as it says it was a rumour and a trade like that would be hard to put together.ReplyDelete
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What Hawai'i Chefs Eat When They Go Out to Local Restaurants
Everyone envisions chefs laboring away at the hot stove, so much so that we sometimes forget they do venture out of their kitchens, eat at other restaurants, try new dishes and relax with friends around a table.
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Norio Yamamoto
Chef/Owner, and Wes Monty, Owner of Monstera
At his restaurant: Tuna tataki ($17.95).
Yamamoto, the sushi chef at this sushi bar/izakaya/noodle house, recommends the tuna tataki so wholeheartedly, he says it's "100-percent guaranteed" you'll like it. Humility or a language barrier prevent him from pinpointing what makes this dish so special, except to say: "Combination of everything, very unique." Lightly seared tuna, ponzu, garlic aioli, what's not to love? The Shops at Mauna Lani, 68-1330 Mauna Lani Drive, No. 111, Kohala Coast, (808) 887-2711, monsterasushi.com.
He also recommends: Paneer makhni at Shivalik Indian Cuisine ($15.95).
If you think it's odd for a Japanese-restaurant owner to recommend an Indian dish, Monty says, "I just like good food, the cuisine doesn't matter." The paneer makhni is a fresh, non-melting Indian cheese cooked in a creamy tomato sauce, resulting in "great flavor," he says. 75-5669 Alii Drive, Kona, (808) 326-9889, shivalikindiancuisine.com.
Edwin Goto
Chef/Owner of Village Burger
At his restaurant: Hawaiian Red Veal burger ($8.50).
Village Burger is a burger joint and, yet, the choices of patty alone—beef, red veal, Kahua Ranch Wagyu, even a Waipio taro burger—can make ordering a hamburger a paralyzing affair. Goto helps with his recommendation: the Hawaii Ranchers red veal patty with tomato marmalade and goat cheese, on a brioche bun. The sweet and tangy tomato marmalade—tomatoes and onions cooked down with red-wine vinegar and a bit of sugar—eliminates the need for ketchup. 67-1185 Mamalahoa Highway, Waimea, (808) 885-7319, villageburgerwaimea.com.
He also recommends: Saimin at Nori's Saimin and Snacks (small special $7.45, large special $8.45).
Nori's Saimin and Snacks may be an hour and 15 minutes away from Waimea, but Goto makes the drive for the saimin and company (Nori's owner is a good friend). He goes to talk shop over a bowl of saimin: "The noodles have a really good texture, and I like the broth," he says. 688 Kinoole St., Hilo, (808) 935-9133.
Aaron Leikam
Chef de Cuisine at 22° North
At his restaurant: Porcini-rubbed, grilled Aakukui Ranch New York Strip Steak ($32).
At its simplest, this is a grilled steak served alongside potatoes, Maui onion rings, Kauai blue oyster mushrooms, all anchored by a natural jus. For Leikam, though, the beef is an ode to Kauai: "Duane Shimogawa of Aakukui Ranch does an excellent job of raising and selecting his cattle," Leikam says. "The flavors that come through his product truly have the flavors of Kauai. The tropical grasses that they feed on are definitely pronounced in his meats." 3-2087 Kaumualii Highway, Lihue, (808) 245-9593, 22northkauai.com.
He also recommends: Carnitas plate from Monico's Taqueria in Kapaa, Kauai ($14).
Leikam is nostalgic for Mexican flavors, having worked with Rick Bayless at Frontera Grill. He finds comfort in the carnitas at Monico's: "The dish is simple and always done well. It is a feel-good meal." 4356 Kuhio Highway, Kapaa, (808) 822-4300, monicostaqueria.com.
Jackie Lau
Roy's Restaurants' Corporate Chef and Opening Chef at the Tavern at Princeville
At her restaurant: Buttermilk fried chicken, sautéed kale and mashed potatoes ($18), Tavern's pie ($9).
"Roy's thing is fried chicken— it's his favorite thing to eat," says Lau. With those kind of expectations, just throwing chicken into the fryer at Yamaguchi's latest project—American comfort food at The Tavern—wouldn't do. "It probably took a good year to get it to where he said, 'That's it,'" Lau says. "There are many steps included in it; it's a Tavern secret recipe, you could say." It's served with mashed potatoes and kale grown in The Tavern's 5,000-square-foot permaculture garden. To complete The Tavern experience, Lau also recommends The Tavern pie, "a really, really rich, dark, Big Island chocolate pudding with Hawaiian salted caramel on top." 5-3900 Kuhio Highway, Princeville, (808) 826-8700.
She also recommends: Menudo at Mariachi's ($12.50).
Lau is "pretty partial" to Mariachi's menudo, a tripe stew with hominy and chilies. "They do a really good job with it; it reminds me of my mom's food," says Lau (who's half-Mexican). "It's hard to find good menudo, so when you find something that tastes great, you go." 3501 Rice St., Lihue, (808) 246-1570, mariachiskauai.com.


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Chinquapin the whimbrel just wanted to trek down from Canada to his winter hotspot in South America. Instead, he ended up in the heart of Hurricane Irene. And he might just live to tell about.
According to USA Today, this particular bird is part of a research study to track the migratory patterns of the whimbrel species, so he has a location tag affixed to him. As a result, researchers were able to receive updates on the bird's status as he moved through Irene at an impressive 30 mph (they normally fly 40-50).
Whimbrels are "capable of really amazing migration flights" of up to 3,500 miles without a rest," Watts says. Chinquapin had already been flying for four days straight without stopping when he ran into Irene.
"It's sort of bad to hit a big storm at the end of a flight that long."
The scientists think Chinquapin found his way to some of the islands in the Caribbean to rest. "We think he's going to make it through the storm," Watts said.
The next update on the bird is expected to arrive today. Given his age (3), the scientists expect the bird is healthy enough to survive such an awesome expedition. [USA Today]


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Gov. Perry urges Texas lawmakers to cut taxes
AUSTIN, Texas (AP) — Gov. Rick Perry says a booming Texas economy and rosier state revenue picture should allow lawmakers to cut taxes.
Addressing the state Senate during Tuesday's opening day of the Texas Legislature, Perry said lawmakers should continue limiting the size of government and "take a look at tax relief."
His comments came a day after Comptroller Susan Combs said Texas would have $96.2 billion in estimated new revenue.
That was a sharp contrast from a far weaker 2011 prediction, when a sluggish economy exacerbated a $27 billion shortfall that triggered deep spending cuts.
Perry said some called for raising taxes two years ago and would do so again.
But he said Texas chose "the fiscally conservative path, and that is the path that has brought us to where we are today."


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The elegant, well defined appearance of MEDALION TOURING is mature, and matches the artistry of a tastefully built, highly tuned machine.
Using the all new 'continuous strand' ADVANTEX packing material technology, MEDALION TOURING achieves extremely high levels of exhaust system efficiency, while maintaining a street driveable, extremely low frequency and deep tone that is well under 93db for discreet sports.
Advantex Performance Exhaust Technology
Advantex is a highly advanced muffler packing material that greatly excels over other packing material types such as a loose packed fiberglass mats and composite cube types.
Advantex internal packing material allows the muffler to reduce sound more, with lestaining extremely high flow characteristics.
Straightest Form, Mandrel Bent
Minimizing bends is a goal of each custom-built Tanabe exhaust system. The truest form is realized to minimize restrictions and maximize useable power gains. Where necessary, the piping is mandrel bent for improved exhaust flow characteristics.
Weight Reduction - 1.2mm Thinwall Piping
Specially engineered for use on our exhaust systems, a piping wall diameter of 1.2mm was developed, which allows weight to be significantly reduces, while remaining durable for extended usage. The SUS204 piping also plays a role in sound output, as it reduces resonation and helps our systems produce their trademark low, deep tone.
Weight Reduction - Hollow Exhaust Hangar
Because every bit of weight savings is beneficial, exhaust hangars have hollow construction to reduce weight.
Weight Reduction - Pressed Flanges
Further weight reduction is achieved and utilized through the use of pressed SUS204 exhaust flanges on portions of the exhaust system.
Special Dual Wall Angle-Cut Tip
While very attractive looking, the dual wall tip has the function of reducing exhaust resonation.
Slim-Line Oval Canister with High Ground Clearance
Because of the new Advantex packing material, the canister size can be much slimmer, weigh less, and reduce sound more than other systems that require large bulky canisters or multiple sub-mufflers. MEDALION TOURING's slim canister is pleasing to the eye, and is designed to allow for high ground clearance, for lowered vehicles.
Highest Grade SUS304 Construction
Tanabe was one of the first Japanese aftermarket companies to create full SUS304 stainless steel exhaust systems many years ago. The highest grade SUS304 stainless steel is used on all systems for maximum durability, as well as lightweightedness.
Streetable System - 93db Compliant, Quality Sound
Tanabe exhaust systems are well known to have one of the most unique exhaust notes available. A trademark of the Tanabe exhaust system is the extremely clean, low, deep tone that is both pleasant and aggressive at all RPM ranges. Designed for motorsports, this exhaust system is also fully streetable and is built to be under 93db when used and installed as a factory replacement exhaust.
03-04 Infiniti G35 Sedan
Pipe Diam.: 70
Tip Diam.: 115


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Sunday School – 10:00 am
Worship Service – 11:00 am
Bible Study – 12:15 pm
Wednesday Bible Study - 6:30 pm
12859 Martin Road Spur
Northport, AL 35473
"Our weekly article in the Northport Gazette and the West Alabama Gazette".
Watering the Tulips
"And why do you look at the speck in your brother's eye, but do not perceive the plank in your own eye? Or how can you say to your brother, 'Brother, let me remove the speck that is in your eye,' when you yourself do not see the plank that is in your own eye? Hypocrite! First remove the plank from your own eye, and then you will see clearly to remove the speck that is in your brother's eye." - Luke 6:41-42
The human mind is an interesting thing – sinfully interesting. We have such a tendency to ignore our own faults while we focus on the faults of those around us. Even in the Garden, Adam declared, "The woman whom You gave to be with me, she gave me of the tree, and I ate" (Genesis 3:12). Adam blamed Eve for his own transgression of God's Law. As if that wasn't enough, he also seemingly blames God for giving Eve to him. Certainly, this trait of shifting blame has been passed down through the centuries since the Fall of man.
This attribute is seen in all facets of life. Children in the schoolroom learn to blame other students to get out of trouble. Drug addicts blame everybody except themselves for their problems. Drunks blame the stresses of life. Adulterers blame the innocent spouse. The list goes on and on. Our nature, as a result of the Fall, simply refuses to see fault in our own selves. However, this is detrimental to spiritual growth.
In our text passage, Jesus is explaining a necessary trait for spiritual growth. As individuals, we must first focus on our own shortcomings and get to work correcting them. We must cry with David, "Search me, O God, and know my heart; Try me, and know my anxieties; And see if there is any wicked way in me, And lead me in the way everlasting" (Psalms 139:23-24). Take notice of the personal possessive pronouns here. Certainly, this must be the way we approach God in prayer. If you spend more time praying for everybody else than you do yourself, there surely may be an issue.
Churches too must not fall into this trap. Satan has used this error to derail many of the Lord's churches. Rather than churches following the instructions of Jesus as it relates to the Great Commission, we often have a tendency to focus on the errors of everybody else. This may make us feel better about ourselves, but it will not lead to spiritual growth in a body. Churches must remain focused. We must ever preach the Gospel in love (Matthew 28:18-20; 1 Corinthians 13). We must teach the truth to our members so that they are always learning and serving (1 Corinthians 14:26).
Children of God, let us not be snared by Satan's trap. Help us to look into the mirror and see our own shortcomings. Individually, help us to work on our own faults so we are better able to help our brethren stand. As churches, help us to seek the Lord's will and way about us. Help us to carry the Gospel forth in our communities as "A city that is set on a hill" (Matthew 5:14). This is our instruction from our Lord. When we focus on ourselves individually and corporately, we will grow spiritually.
Watering the Tulips is brought to you by Sovereign Grace Baptist Church in Northport, AL. For more information, please visit www.sovereigngrace.net. "Your app to the Gospel" is available for download in the iTunes app store and the Android market. Download it today.


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Private Members Area – What Are Shippers and Why Are They A Problem?
We have discussed "shippers" many times on this site and Courtney had talked about doing a post about them. I responded that I would take the "anti-shipper" view. Considering the two people who are at the top of the leaderboard this season, I figured it was a good time to post it.
What is a shipper? Well, a shipper is someone who is invested in the romantic relationship of two people who are on TV. More carefully defined, it is a person who wants two characters to get together and/or shows support for two characters already together. This started in the X-Files fandom and was originally limited to fictional programs. Of course, back then there wasn't "reality" TV like there is now. I was heavily involved in the X-Files fandom and that, I must say, was back when shippers were fun. At first. But I digress.
I have no real problem with the casual observation that two people look hot together. Or the observation that it seems OBVIOUS that they're knocking boots outside the dance studio. Or even the observation that the babies would be so pretty. Especially when there seems to be some evidence that it is true. I think this is relatively normal behavior. But I also don't think this is really "shipping" as it is defined nowadays. I think it's speculation, and usually harmless. I would even go so far as saying, when limited to FICTIONAL characters, it can be fun, in its light hearted, romance novel, fan fiction form. We'll talk about slash another time. I don't want to make John's delicate sensibilities catch on fire or anything. 😀 But as long as it stays just for fun and an OCCASIONAL past time, no harm no foul. Read more..