The standardized approach is very similar to the original Basel I. Instead of giving an identical weighting of 100% to all loans, the weighting will be related to the riskiness of the transaction, as identified by the rating of external rating agencies. An example is given for corporate loans.
 The reader is advised to read the Basel II document for a complete analysis of weighting for different types of transactions.
|AAA – AA–||A+ – A–||BBB+ – BBB–||BB+ – BB–||Below BB–||Unrated|
For example, a loan to a corporate client rated A+ would be weighted at 50%. This implies that on a loan of $100, the capital charge is calculated as follows:
Capital ≥ 8% × ($100 × 50%) = $4
From the perspective ...