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China Business Opportinuty

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Basel II A round of deliberation took place in Basel, Switzerland. Carried out by the central bankers around the world I.e. the Basel committee published a set of minimum requirement of capital for a bank. This agreement is known as the Basel accords, it was implemented by law in the G10 countries, which are the countries who have a general agreement on borrowing. In nearly all these countries the central bankers have responsibilities in terms of managing banking regulations and financial markets. By enforcing the Basel accords within the banking sector in the G10 countries, it has structured various approaches banks can use in terms of dealing with the credit risk to some degree. Basel aims to classify and group all banks assets into five categories of credit risk. Basel II was the second of the published accords by Basel central committee on banking supervision. There was need to build a frame work which deals with risk management, particularly in terms of borrowing, banks needed an international platform that they can rely on to operate their lending and borrowing safe and soundly on an international level. ...read more.


Basel II has provided banks with more robust risk sensitive approach for assessment of banking organisations (K Ott, Basel Briefing 13); It requires an examination of the off balance sheet instruments such as liquidity facilities and the effectiveness of risk transfer. The Pillar II in particular provides a scope for a through firm wide view of risk considering and internal and external factors. Basel II has not only helped banks to develop more risks sensitive measurements but also helped link risk assessments methods with business and operational use incorporated. The pillar iii in the Basel accords the aims to do disclosure of information with banks aim to improve market forces driving towards improve overall risk management. The Basel trading book review introduction has enhanced guidance to provide clarity around the eligibility of instruments for trading books, with a revised focus on the liquidity of underlying positions and the ability to price them effectively. Banks can take advantage of new approaches and make use of more sophisticated risk measurements systems. ( R Varadachari) Hence by putting in place approved risk measurement models the banking world has developed more confidence in dealing with risk management. ...read more.


In sense all this will lead to assess to capital markets and banks operating effectively. Overall Basel ii has been a milestone in the risk management world, banks now using innovative ways to measure risks and market value to avoid unexpected losses. Reference Benink & Kaufman- Financial Times publication, 2 Feb 2008, Turmoil reveals the inadequacy of Basel II, By Heralds Blink and Gorge Kaufman. Basel Briefing 13 KPMG-, 13th edition Jan 08, financial services, Report - Basel Implementation worldwide. Jorg Hashagen. G Haber - International Atlantic Economic Society, Title- Basel II, International Competition Issues. By Gottfried Haber. Nout Wellink- The Banker (article) a robust framework for risk management, 2008 Feb 1 FT Publications. Pingaley and Kiran- The Banker, artice, Basel II Ease the Path To compliance. FT Publications 2005. Ravi- Varadachari- Special supplement, Banks that try to plan and comply with Basel II Advance approaches can use them for strategic decision. FT publications2005. P Larsen - Financial times article, Banking regulators call for clean state, Oct 17 2008. T Congdon- Northern Rock shows up mess of Basel rules, telegraph 29th Jan 2008. Hans Helbekkmo - The ripple Effect: how Basel will impact institution of all sizes. E Risk Holdings 2005 Pg 7, 9 ?? ?? ?? ?? Risk Management 1 Ninad Pattalwar ...read more.

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