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From Wikipedia, the free encyclopedia

The term Advanced IRB or A-IRB is an abbreviation of advanced internal ratings-based approach, and it refers to a set of credit risk measurement techniques proposed under Basel II capital adequacy rules for banking institutions.

Under this approach the banks are allowed to develop their own empirical model to quantify required capital for credit risk. Banks can use this approach only subject to approval from their local regulators.

Under A-IRB banks are supposed to use their own quantitative models to estimate PD (probability of default), EAD (exposure at default), LGD (loss given default) and other parameters required for calculating the RWA (risk-weighted asset). Then total required capital is calculated as a fixed percentage of the estimated RWA.

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  • ✪ Membership Requirements for Institutional Review Boards (IRB)
  • ✪ Institutional Review Board (IRB) Challenges in QI & Research
  • ✪ SJSU IRB Workshop Part 1
  • ✪ IPPCR 2016: Ethical Principles in Clinical Research
  • ✪ Advanced Robotic Finishing - Innovation Award 2017 Finalist Spotlight

Transcription

Welcome! My name is Misti Ault Anderson, and I work in OHRP’s Division of Education and Development. This tutorial was created to help explain some of the requirements relating to IRB membership. It reviews the requirements for IRB membership set out in the HHS regulations for the protection of human subjects at 45 CFR Part 46, and answers some common questions. After completing this tutorial, you should have a better understanding of the regulations regarding IRB membership and how to apply them. Let’s get started! An Institutional Review Board, or IRB, is a committee that monitors and protects the rights and welfare of human subjects in research. IRB review is a core component of human subjects protections under the HHS regulations. The IRB determines whether the reviewed research activities meet regulatory requirements and standards prior to and throughout the course of the research. The weight of this responsibility means that the selection of members to serve on the IRB should be thoughtfully considered, with a particular emphasis on their experiences and perspectives. The regulations require each IRB to have at least five members with varying backgrounds. The IRB must be sufficiently qualified through the experience, expertise, and diversity of its members to review the institution’s research activities. Relevant considerations include training and education, race, gender, cultural background, and sensitivity to community attitudes. In addition to a diversity of experience and perspectives, the IRB, as a whole, must be able to review proposed research in terms of institutional commitments and regulations, applicable laws, and standards of professional conduct and practice. This means that its membership must include people who are knowledgeable in these areas. An IRB needs to possess the professional competence to determine the acceptability of proposed research with respect to regulations and policies, which includes whether the design and methodology of the proposed research is ethically appropriate. It is expected that the IRB will have the appropriate expertise to meet the membership requirements with respect to the type of research it regularly reviews. For example, an IRB that routinely reviews psychology research would be expected to include one or more members with an expertise in that area. Similarly, if an IRB regularly reviews research involving vulnerable populations, it should have one or more members who have knowledge of and experience working with those populations. To help ensure the IRB has the necessary expertise and diversity, the regulations put forth some minimum membership requirements. As noted earlier, there must be at least five members. Of these, each IRB must include: at least one scientist, at least one nonscientist, and at least one member who is not otherwise affiliated with the institution. Institutions must indicate in the membership list whether members are scientists or nonscientists, and whether or not they are affiliated with the institution. In addition to the other categories of members, if an IRB oversees a study involving prisoners, as defined under Subpart C, at least one member of the IRB must be a prisoner or a prisoner representative with the appropriate background and experience to serve in that capacity. OHRP recommends that a prisoner representative have a close working knowledge, understanding, and appreciation of prison conditions from the prisoner's perspective. If a particular proposal is reviewed by multiple IRBs, which may occur for a cooperative research project, only one of the reviewing IRBs needs to satisfy this requirement. Note that when reviewing research involving prisoners, a majority of the IRB members (excluding the prisoner member) must not be associated with the prison(s) involved, outside of their membership on the IRB. Each IRB must have at least one designated scientist member. This member’s primary concerns are in scientific areas. This means at least one member must be able to review research activities from a scientific perspective. This member should be able to provide meaningful insight about the science, such as the scientific validity of the hypothesis or proposed methodology. When considering whether an individual fulfills this requirement, think about whether their professional training, background, and occupation equip them to review research activities from the standpoint of a scientist working in the biomedical or socio-behavioral disciplines. If so, that person might be a good choice to fulfill this requirement. Linda studied philosophy in college and later earned a Master’s Degree in Public Health. She currently conducts epidemiological studies on infectious diseases with major public health implications at a state university. Is she qualified to serve as the scientist member on her university’s IRB? Likely yes. Regardless of Linda’s undergraduate degree in the humanities, her postgraduate training in public health and her experience in conducting research in infectious diseases would likely qualify her to serve as a scientist member on the IRB. Each IRB must also have at least one designated nonscientist member. This member must be a person whose primary concerns are in nonscientific areas. Their professional training, background, and occupation should indicate they are likely to review research from a perspective outside the realm of biomedical or socio-behavioral science. This requirement helps ensure that there will be discussion of diverse perspectives and consideration of a broad range of issues that may affect research subjects. Peter has a PhD in Social Work and was trained in the scientific method for his dissertation. However, for the past 10 years, Peter has worked to secure access to public benefits for underserved immigrant communities. The IRB chair wants to recruit him as a nonscientist member. Is Peter eligible for the role? Likely yes. Even though Peter has received training in the scientific methodology, his professional experience includes no direct involvement in any scientific work. It’s reasonable to assume that Peter will be inclined to view research from a standpoint outside of any scientific discipline. Thus, he is likely eligible to serve as a nonscientist member of the IRB. Each IRB must also have at least one designated unaffiliated member. The unaffiliated member must not be affiliated with the institution, aside from serving on the IRB. This member also must not be someone who is an immediate family member of a person affiliated with the institution. OHRP considers spouses, parents, and children to be immediate family members. Anyone who is affiliated or is an immediate family member of an affiliated person cannot serve in this role. For example: part-time or full-time employees, current students, members of any governing panel or board of the institution, paid or unpaid consultants, healthcare providers holding credentials to practice at the institution, and volunteers working at the institution on business unrelated to the IRB are all considered “affiliated,” and as such, they or their immediate family members cannot fulfill the unaffiliated member requirement. Some limited institutional associations still permit persons to serve as an unaffiliated IRB member. Examples include: past or current patients of the institution, past or current subjects in research conducted by the institution, former students of the institution, infrequent and small donors to the institution, or former or retired employees not receiving benefits from the institution, such as a pension, housing, or health care. Such individuals could serve as unaffiliated members of the IRB. Note that paying unaffiliated members for their IRB service does not make them affiliated. Although the unaffiliated member is often referred to as the community member or community representative, the regulations call for an “unaffiliated” member, and don’t specify that this member represents any particular community. The regulations require an individual who is not otherwise affiliated with the institution. For example, a hospital chaplain may be an active and vocal community advocate but if she is employed by the hospital, she cannot be the unaffiliated member on the hospital’s IRB, nor could an immediate family member such as her spouse. However, she could serve as a nonscientist member. Note that the regulations allow for a member to fulfill more than one role. For example, one person could serve as both the unaffiliated member and the nonscientist member. Dr. Jones worked as a pediatrician at your research medical center for three years prior to her retirement. She does not currently maintain any ties with the institution. As the IRB Chair, you would like to recruit her to serve as the unaffiliated member (or what many refer to as the “community member”) of your IRB. Is Dr. Jones eligible for this role? Likely yes. Dr. Jones is eligible to be considered as an unaffiliated member of your institution’s IRB if she is not receiving any benefits from the institution such as retirement, pension, or healthcare benefits and does not have any other affiliation with the institution. An IRB administrator who meets the membership requirements may also serve as a member, provided the administrator is included on the IRB membership list (as required for IRB members in general). Note that an IRB chair is necessarily a member of the IRB. If an IRB regularly reviews research involving populations vulnerable to coercion or undue influence, such as children, prisoners, individuals with impaired decision-making capacity, or economically or educationally disadvantaged people, consideration must be given to including as an IRB member one or more individuals who are knowledgeable about and experienced in working with these populations. An IRB may decide that reviewing a particular research proposal or set of activities requires a specific area of expertise not provided by its membership. When this occurs, it may invite individuals with the necessary competence to supplement the IRB’s experience and assist with review. For example, someone with a particular expertise in epidemiology or pediatric oncology might be needed to review a specific clinical protocol. Or an individual who has experience with and an understanding of a particular community’s norms may be asked to provide input on a study’s recruitment strategy. Outside experts don’t need to be present for all aspects of discussion, and their participation can take various forms, such as in-person attendance or teleconference with a convened meeting, or providing written or oral advice in advance of the meeting. However, participation of non-member experts in a convened meeting must be documented in the minutes. It is important to remember that non-member experts may not vote with the IRB. IRBs may designate alternates for some or all of their primary members to ensure that full board meetings can be convened, even if one or more of the primary members are unavailable or lack the necessary expertise. Although how an institution selects and identifies alternate members is left to the institution’s discretion, the requirements regarding the number and type of members that must be present at a meeting must still be met. For example, if no designated nonscientist member can attend a meeting, the alternate who attends must also be a nonscientist. The HHS regulations do not address term limits or length of service for IRB members or chairpersons. It is up to the institution or the organization operating the IRB as to whether and how it develops policies regarding length of service, the staggering of term limits, or balancing continuity of experience with the inclusion of new perspectives and expertise. That concludes this review of the IRB membership requirements. We hope you found it helpful. We’ve focused on the key ideas here, but encourage you to consult the regulations for more detailed information. Visit OHRP’s website, www.hhs.gov/ohrp, for additional information. Thank you!

Contents

Some formulae in internal-ratings-based approach

Some credit assessments in standardised approach refer to unrated assessment. Basel II also encourages banks to initiate internal ratings-based approach for measuring credit risks. Banks are expected to be more capable of adopting more sophisticated techniques in credit risk management.

Banks can determine their own estimation for some components of risk measure: the probability of default (PD), loss given default (LGD), exposure at default (EAD) and effective maturity (M). For public companies, default probabilities are commonly estimated using either the "structural model" of credit risk proposed by Robert Merton (1974) or reduced form models like the Jarrow-Turnbull model. For retail and unlisted company exposures, default probabilities are estimated using credit scoring or logistic regression, both of which are closely linked to the reduced form approach.

The goal is to define risk weights by determining the cut-off points between and within areas of the expected loss (EL) and the unexpected loss (UL), where the regulatory capital should be held, in the probability of default. Then, the risk weights for individual exposures are calculated based on the function provided by Basel II.

UnexpectLoss.jpg

Below are the formulae for some banks’ major products: corporate, small-medium enterprise (SME), residential mortgage and qualifying revolving retail exposure. S being Min(Max(Sales Turnover,5),50 )

In the formulas below,

Corporate Exposure

The exposure for corporate loans is calculated as follows[1]

Correlation

AVC[2] (Asset Value Correlation) was introduced by the Basel III Framework, and is applied as following :
  • if the company is a large regulated financial institution (total asset equal or greater to US $100 billion) or an unregulated financial institution regardless of size
  • else

Maturity adjustment

Capital requirement

Risk-weighted assets

Corporate exposure adjustment for SME

For small and medium enterprises with annual Sales Turnover below 50 million euro, the correlation may be adjusted as follows:[3]

Correlation

In the above formula, S is the enterprise's annual sales turnover in millions of euro.

Residential mortgage exposure

The exposure related to residential mortgages can be calculated as this[4]

Correlation

Capital Requirement

Risk-weighted assets

Qualifying revolving retail exposure (credit card product)

The exposure related to unsecured retail credit products can be calculated as follows:[5]

Correlation

Capital Requirement

Risk-weighted assets

The advantages

  • Basel-II benefits customers with lower probability of default.
  • Basel-II benefits banks to hold lower capital requirement as having corporate customers with lower probability of default (Graph 1).

Corprisk.jpg

  • Basel-II benefits SME customers to be treated differently from corporates.
  • Basel-II benefits banks to hold lower capital requirement as having credit card product customers with lower probability of default (Graph 2).

Cardrisk.jpg

External links

References

  • Duffie, Darrell and Kenneth J. Singleton (2003). Credit Risk: Pricing, Measurement, and Management. Princeton University Press.
  • Lando, David (2004). Credit Risk Modeling: Theory and Applications. Princeton University Press. ISBN 978-0-691-08929-4.
This page was last edited on 31 October 2019, at 09:58
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