Basel II: panacea or a missed opportunity?

Banca Nazionale del Lavoro Quarterly Review | September 1, 2004| | Copyright

Introduction

For a number of years now, the Basel Committee has been working tirelessly to get agreement on a New Capital Accord to replace the original agreed on by G10 bank supervisors back in July 1988. This quest has been driven by a recognition that the original has become superseded by market developments, not least in the area of risk management, and that it is failing to operate in the intended fashion because of, for example, 'regulatory capital arbitrage' (Jones 2000). The first visible fruits of its labour appeared in June 1999 in the form of a consultative paper outlining ...

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