Resources for Basel II Capital Accord (Basel II)

More Credit Shocks Could Revive Crisis

online.wsj.com

Global financial markets may well suffer a relapse of the turmoil sparked by last year's collapse of securities backed by U.S. subprime mortgages, the world's top banking authorities warned.

The U.S. Federal Reserve and other central banks have pumped enough money into the banking system to help alleviate the worst of the initial credit crunch, and major banks have now accounted for tens of billions of dollars in losses that had been moldering in off-balance-sheet entities. But the U.S.-led economic slowdown and continued uncertainty about troubled securities may lead banks to further reduce lending and choke off economic activity, the Financial Stability Forum said in a report Saturday.

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