• In our framework, RAROC is defined as the ratio of After Tax Net Income Risk Adjusted Basis to Total Economic Capital.    
  • Economic capital for credit, market and operational risks is calculated separately and independently.    
  • For risk based pricing we develop transaction evaluation templates that compute the credit spread component required to compensate the Bank for the Expected Loss and Unexpected Loss component of credit risk, and achieve a desired level of RAROC    
  • Our RAROC model is used to periodically measure and report business unit performances