Developing economies can strengthen their financial systems by implementing the main elements of global regulatory reform. But to build an effective prudential framework, they may need to adapt international standards taking into account the sophistication and size of their financial institutions, the relevance of different financial operations in their market, the granularity of information available and the capacity of their supervisors. Under a proportionate application of the Basel standards, smaller institutions with less complex business models would be subject to a simpler regulatory framework that enhances the resilience of the financial sector without generating disproportionate compliance costs. This paper provides guidance on how non-Basel Committee member countries could incorporate banks’ capital and liquidity standards into their framework. It builds on the experience gained by the authors in the course of their work in providing technical assistance on—and assessing compliance with—international standards in banking supervision.

The Basel Committee on Banking Supervision (BCBS) sets the guidelines for world-wide regulation of banks. It is the forum for agreeing international regulation on the conduct of banking. Based on special access to the archives of the BCBS and interviews with many of its key players, this book tells the story of the early years of the Committee from its foundation in 1974/5 right through until 1997 - the year that marks the watershed between the Basel I Accord on Capital Adequacy and the start of work on Basel II. In addition, the book covers the Concordat, the Market Risk Amendment, the Core Principles of Banking and all other facets of the work of the BCBS. While the book is primarily a record of the history of the BCBS, it also provides an assessment of its actions and efficacy. It is a major contribution to the historical record on banking supervision.

This book is about the new capital adequacy framework – known as Basel II – approved by the Basel Committee in 2004. It aims to discuss Basel II implementation in different categories of developing countries, including emerging market economies, such as Brazil and low-income countries such as Ethiopia and Zambia.

With the endorsement of the Basel III contracts on the supervision of the banking industry, management of capital buffers throughout the business cycle have attained crucial importance for the reinforcement of financial stability in the banking system. This book departs from previous studies through its focus on developing countries and their assessment of the behavior of capital and risk.

Basel II is a global regulation, and financial institutions must prove minimum compliance by 2008 The authors are highly sought-after speakers and among the world’s most recognized authorities on Basel II implementation Accompanying CD-ROM includes spreadsheet templates that will assist corporations as they implement Basel II

This book analyzes the impact of Basel Accord in Bangladesh. More specifically, it focuses on the credit risk homogenization under standardized approach of Basel Accord where External Credit Rating Agencies (ECAIs) are allowed to rate the exposures, the potential risk of allowing sub-ordinated debt (Sub-debt) as Tier 2 capital, and multiple bank distress cases as a real-world scenarios. In doing so, the book explores why the ECAIs rating fail to capture the real credit risk of exposure and to what extent sub-debt is reliable as regulatory capital. With that, the book's scope is categorized into three tracts (i) analyzes the ECAIs incentive and sanction issues from institutional economics perspective (ii) discusses the ill-impact of Naïve adoption of sub-ordinated debt as regulatory capital and its associated risk on financial system, and (iii) providing readers an empirical illustrations of bank distress when an economy tapped into institutional failures in the above-mentioned tracts (i) and (ii).

The First Basel Capital Accord, implemented in 1988, was aimed at ensuring the soundness and stability of the international banking system. The new accord, Basel II, which is planned for implementation in December 2006, is intended to strengthen the framework for dealing with credit risk. This book provides an informative analysis of what Basel II means for the small and medium-sized enterprize (SME) sector in Europe and its impact on its credit financing conditions. It also presents a detailed analysis of how banks formulate an internal rating system and illustrates how this system works in practice. Finally, it concludes with the key measures that should be taken by banks, SMEs, and public policymakers to improve financing in the new rating culture.

In this paper, we provide an overview of the concerns surrounding the variations in the calculation of risk-weighted assets (RWAs) across banks and jurisdictions and how this might undermine the Basel III capital adequacy framework. We discuss the key drivers behind the differences in these calculations, drawing upon a sample of systemically important banks from Europe, North America, and Asia Pacific. We then discuss a range of policy options that could be explored to fix the actual and perceived problems with RWAs, and improve the use of risk-sensitive capital ratios.

Covers the history of the Bank for International Settlements (BIS), from its founding in Basel in 1930 to the end of the Bretton Woods system in 1973, with a focus on cooperation among the main central banks for the stability and efficiency of the international monetary system.