Basel2

The efforts of the Basel Committee on Banking Supervision (BCBS) to revise the standards governing the majuscule adequacy of internationally active banks achieved a critical milepost in the publication of an agreed text in June 2004. The global Convergence of Capital Measurement and Capital Standards: a revise Framework describes a to a greater extent comprehensive measure and token(prenominal) standard for capital adequacy that national supervisory governing represented on the BCBS are now working to experience through domestic rule-making and adoption procedures.
The Basel II framework, or revise Framework, as the new-fashioned standard is frequently called, seeks to improve on the existing rules by aligning regulatory capital requirements more closely to the underlying risks that banks face. In addition, the Revised Framework is intend to promote a more forward-looking approach to capital supervision, one that encourages banks to identify the risks they may face, today and in the future, and to take on or improve their ability to manage those risks.



As a result, the Revised Framework is intended to be more flexible and better able to evolve with advances in markets and risk counsel
In releasing the Revised Framework last summer, the BCBS re-iterated its goal to maintain its active dialogue with the industry to ensure that the new framework keeps pace with, and can be applied to, on-going developments in the financial services sector. Two areas that the BCBS identified where warm work should be done concerned (1) finding a prudentially sound treatment under the Revised Framework for exposures to biramous default, where the risk of both a borrower and a guarantor defaulting on the same obligation may be substantially glower than the risk of only one of the parties defaulting; and (2) applying the Revised Framework to indisputable exposures arising from trading activities.
Given the interest of both banks and securities firms in the capableness solutions to these particular...If you want to get a full essay, order it on our website: Orderessay



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