Questions about Economic Capital Charge

[cqbzxk]

Hi guys, I went over topic of economic capital chapter and got a confusion.
the book says Economic Capital charge for Market risk
F1*VaR+F2*Max()+F3*Max()
also, credit capital charge=capital factor*market value of position.
My confusion is that what's the difference between Basel MRC CRC method and Economic capital charge, i.e. we use IRB or SA to calculate credit capital charge, but in there, they use Capital factor, what is the capital factor here? how do get this factor?
thanks!

 

[afterworkguinness]

Basel is concerned with regulatory capital. RAROC, and this part of the reading, is concerned with economic capital. Hence the different measures.