Resources for Basel II Capital Accord (Basel II)

Basel II - Accord would have alleviated sub-prime crisis, says Commitee

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The Basel Committee on Banking Supervision, in its October meeting, believes that the implementation of the Basel II capital framework would have gone some distance to alleviate the current global credit crunch which has resulted from the sub-prime lending crisis.

Nout Wellink, the chairman of the Basel Committee on Banking Supervision observed that the accord is designed to combat liquidity risk and would have improved the robustness of valuation practices and market transparency for complex and less liquid products. Committee members agreed that Basel II implementation would help make the capital base more relevant to banks' changing risk profiles, and would also serve to create incentives for better risk measurement and management, including for securitisation exposures and liquidity lines for asset-backed commercial paper programmes.

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