The Likely Impact of the Basel II Accord on Shipping Finance - Dissertation Example

Only on StudentShare

Extract of sample
The Likely Impact of the Basel II Accord on Shipping Finance

The main purpose of the research is to present that the Basel Committee on Banking Supervision developed a set of rules in relation to the capital adequacy requirement for banks in 1988 known as Basel 1 which primarily targeted credit risk and which made it a requirement that banks “hold capital equal at least 8% of the risk-weighted assets”. Under the Basel I Accord “...the amount of capital being put aside by a bank as a type of ‘buffer’ for the risk taken was very simple and standardized.” However, the Basel Committee of Banking Supervision needing a more risk-sensitive approach to capital requirements as well as needing to incorporate “more advanced modeling and risk management in the regulatory banking system...designed a new worldwide framework” referred to as Basel II which replaced the existing Basel I legislation. It is held that Basel II and the Capital Requirements Directive (CRD) should enable effective operation within the European Financial Single Market and to enable competition with “peer institutions on a level playing field.” Stated as the purpose of Basel II is “to improve the stability and soundness of the financial system by more closely linking capital requirements to risks and by promoting a more forward-looking approach to capital management”. In addition the Basel II has the objective of maintaining the “aggregate level of minimum capital requirements, while also providing incentives to adopt more risk-sensitive approaches. ...
Download paper


The aim of the paper was to determine the impact of Basel II Accord on shipping industry financing. The aim of the accord is to impose a formula that is used by banks to access risk before lending to any organisation. Shipping industry has a unique risk that affects the financial performance. …
Author : kathryne03

Related Essays

Financial Services
12 pages (3012 words) Essay
The research as defined examines M&A of the banking industry in both the US and EU banking industry
16 pages (4016 words) Dissertation
5 pages (1255 words) Essay
5 pages (1255 words) Term Paper
Basel Accord
4 pages (1004 words) Essay
12 pages (3012 words) Essay
Corporate Finance II Essay
4 pages (1004 words) Essay
8 pages (2008 words) Assignment
The accounting equation. AT&T and Verizon.
1 pages (251 words) Essay
8 pages (2008 words) Essay
Got a tricky question? Receive an answer from students like you! Try us!