bcbsc111 - Superseded document Basle Capital Accord...

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1 I NTERNATIONAL C ONVERGENCE OF C APITAL M EASUREMENT AND C APITAL S TANDARDS ( July 1988, UPDATED TO April 1998 ) 1 Introduction 1. This report presents the outcome of the Committee’s work over several years to secure international convergence of supervisory regulations governing the capital adequacy of international banks. Following the publication of the Committee’s proposals in December 1987, a consultative process was set in train in all G-10 countries and the proposals were also circulated to supervisory authorities worldwide. As a result of those consultations some changes were made to the original proposals. The present paper is now a statement of the Committee agreed by all its members. It sets out the details of the agreed framework for measuring capital adequacy and the minimum standard to be achieved which the national supervisory authorities represented on the Committee intend to implement in their respective countries. The framework and this standard have been endorsed by the Group of Ten central-bank Governors. 2. The document is being circulated to supervisory authorities worldwide with a view to encouraging the adoption of this framework in countries outside the G-10 in respect of banks conducting significant international business. 3. Two fundamental objectives lie at the heart of the Committee’s work on regulatory convergence. These are, firstly, that the new framework should serve to strengthen the soundness and stability of the international banking system; and, secondly, that the framework should be fair and have a high degree of consistency in its application to banks in different countries with a view to diminishing an existing source of competitive inequality among international banks. The Committee notes that, in responding to the invitation to comment on 1 This document contains the July 1988 text of the Basle Capital Accord amended to reflect five textual changes: the November 1991 amendment (concerning general provisions) to paragraphs 18-21 of the main text and Annex I, paragraph D; the July 1994 amendment (concerning the qualification for the OECD risk weighting) to paragraph 35 and to footnote 2 of Annex 2; the April 1995 amendment to Annex 3 (concerning certain off-balance-sheet items) and claims collateralised by securities issued by OECD non-central government public-sector entities; the April 1998 amendment to Annex 2 (concerning the list of assets eligible for a 20% risk weighting); the removal of references to transitional and implementation arrangements. The text has not been changed to reflect the market risk amendment introduced in January 1996. That amendment appears as issued in Volume II of the Compendium. Superseded document
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This note was uploaded on 09/19/2011 for the course FINS 3650 taught by Professor Arnold during the Three '11 term at University of New South Wales.

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bcbsc111 - Superseded document Basle Capital Accord...

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