1.   Banks first have to assess whether a borrower is a credit risk.

2.   Banks will be able to choose among different methods of measuring credit risk.

3.   But they acknowledge they have less information about credit risk that is bought or traded by non-bank investors.

4.   Its new scheme will assess the credit risk of new borrowers according to their age, Marital status and number of children.

5.   The only credit risk is therefore with the clearing house.

6.   The clearing house withstands all the credit risk involved in being the counterparty to every transaction, by using the system of daily marking to market.

7.   The credit risk to the clearing house has now disappeared because accumulated losses are not allowed to build up.

8.   The clearing house is also protected from excessive credit risk through the operation of a system of daily price limits.