Resources for Basel II Capital Accord (Basel II)

Basel II important to address recent global credit crunch

investmentexecutive.com

The Basel Committee on Banking Supervision stressed the importance of implementing the new capital adequacy framework for global banks, known as Basel II, to address systemic risks such as the recent global credit crunch.

At the conclusion of its October meeting, Nout Wellink, chairman of the Basel Committee on Banking Supervision and president of the Netherlands Bank, noted the importance of implementing the Basel II capital framework, strengthening supervision and risk management practices in areas like liquidity risk, and improving the robustness of valuation practices and market transparency for complex and less liquid products.

Committee members agreed that Basel II implementation will help make the capital base more relevant to banks' changing risk profiles and that the committee will closely monitor its impact. The framework will also create incentives for better risk measurement and management, including for securitisation exposures and liquidity lines for asset-backed commercial paper programmes.

The committee also has been working to introduce new standards for banks to hold capital against the default risk associated with complex, less liquid credit products in the trading book. It agreed to seek public consultation on the proposed standards and to assess their impact on banks' capital requirements.

View the Resource

Share or bookmarklet this web page at: