Cosc V2.0

The document discusses a proposed approach called Capital Optimisation, Stability and Control (COSC) for managing bank capital. COSC aims to optimize retained portfolio capital, stabilize capital levels, enhance business franchises, buffer balance sheets, recycle credit, and ensure tight governance. It involves optimizing credit valuation adjustments, derivative risk equivalents, and adjusted loss equivalents across business cycles. Implementing COSC could generate trading revenue and leverage business franchises while improving management controls and compliance. The team behind COSC has a track record of success in major institutions developing key risk management techniques.