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Unformatted text preview: Outline Basel II The three pillars of Basel II Bank Regulation Basel II Haipeng Xing Haipeng Xing AMS517, SUNY Stony Brook Bank Regulation Basel II Outline Basel II The three pillars of Basel II Outline 1 Basel II Accord 2 The three pillars of Basel II Haipeng Xing AMS517, SUNY Stony Brook Bank Regulation Basel II Outline Basel II The three pillars of Basel II Basel Capital Accord I We now focuses on the new Basel Captial Accord with respect to rating based modeling, probabilities of default, and the required economic capital of financial institutions. Almost two decades have passed since the Basel Committee on Banking Supervision (BCBS) introduced its 1988 Captial Accord (the Accord). The major impetus for this Basel I Accord was the concern of the governors of the central banks that the captial as a cushion against losses of the worlds major banks had become dangerously low after persistent erosion through competition. Since 1988 the business of banking, risk mangament practices, supervisory approaches, and financial markets have undergone significant transformations. Consequently, BCBS released a proposal in June 1999 to replace the old Accord with a more risk-sensitive framework, the New Basel Capital Accord (Basel II). The initial consultative proposal contained three fundamental innovations, eah designed to introduce greater risk sensitivity into the accord: Haipeng Xing AMS517, SUNY Stony Brook Bank Regulation Basel II Outline Basel II The three pillars of Basel II Basel Capital Accord II 1 The current standard should be supplemented with two additional...
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This note was uploaded on 10/30/2011 for the course AMS 517 taught by Professor Xinghaipeng during the Spring '11 term at SUNY Stony Brook.
- Spring '11