The term standardized approach (or standardised approach) refers to a set of credit risk measurement techniques proposed under Basel II, which sets capital adequacy rules for banking institutions.
In many countries this is the only approach regulators approved in the initial phase of Basel II implementation.
The Basel II accord proposes to permit banks a choice between two broad methodologies for calculating their capital requirements for credit risk.
NOTE: For some "unrated" risk weights, banks are encouraged to use their own internal-ratings system based on Foundation IRB and Advanced IRB in Internal-Ratings Based approach with a set of formulae provided by the Basel-II accord.
There exist several alternative weights for some of the following claim categories published in the original framework text.