Resources for Basel II Capital Accord (Basel II)
Basel banking watchdog to tighten equity requirements for trading positions
www.hemscott.com The Basel Committee on Banking Supervision plans to tighten the rules for complex financial instruments sold by banks, forcing them to hold more equity for trading positions to mitigate potential losses, Boersen-Zeitung reported, citing the international regulator. The committee, responsible for drawing up the new framework on banking surveillance known as Basel II, wants stricter parameters for the so-called value at risk (VAR) model used for banks' trading positions, the paper said. While current VAR models usually measure the upper limit of potential losses of a financial portfolio over 10 days with a statistical reliability of 99 percent,
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