What is it about?
Developments since the introduction of the 1988 Basel Capital Accord have resulted in growing realisation that new forms of risks have emerged and that previously existing and managed forms require further redress. The revised Capital Accord, Basel II, evolved to a form of meta regulation – a type of regulation which involves the risk management of internal risks within firms. The 1988 Basel Accord was adopted as a means of achieving two primary objectives: Firstly, “...to help strengthen the soundness and stability of the international banking system – this being facilitated where international banking organisations were encouraged to supplement their capital positions; and secondly, to mitigate competitive inequalities.”
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Why is it important?
As well as briefly outlining various efforts and measures which have been undertaken and adopted by several bodies in response to the recent Financial Crisis, this chapter considers why efforts aimed at developing a new framework, namely, Basel III, have been undertaken and global developments which have promulgated the need for such a framework. Further, it attempts to evaluate the strengths and flaws inherent in the present and future regulatory frameworks by drawing a comparison between Basel II and the enhanced framework which will eventually be referred to as Basel III.
Perspectives
En plus de décrire brièvement les divers efforts et mesures qui ont été entrepris et adopté par plusieurs organes en réponse à la récente crise financière, ce chapitre examine les raisons pour lesquelles des efforts visant à développer un nouveau cadre, à savoir Bâle III, ont été entrepris et les évolutions mondiales qui ont rendu nécessaire un tel cadre. En outre, il tente d'évaluer les forces et les défauts inhérents aux cadres réglementaires actuels et futurs en établissant une comparaison entre Bâle II et le cadre renforcé qui sera éventuellement appelé Bâle III.
Prof Marianne Ojo
Northwestern University
Read the Original
This page is a summary of: Basel III and Responding to the Recent Financial Crisis: Progress Made by the Basel Committee in Relation to the Need for Increased Bank Capital and Increased Quality of Loss Absorbing Capital, SSRN Electronic Journal, Social Science Electronic Publishing,
DOI: 10.2139/ssrn.1680886.
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