Banking - Essay Example

Extract of sample
Banking

Not only the internal rating, but also the governance and the quality of risk management will be a major factor in being able to use internal ratings as a basis for calculating regulatory capital requirements.
National supervisors will authorise firms to use one of the internal-ratings based approaches on a case by case basis. Basel II also introduces capital requirements for operational risk, a risk category that was not explicitly addressed under the Basel I rules.
To a large extent, the proposed Basel II was in response to widespread criticism of Basel I. But it also reflected additional thought and analysis of the role of bank capital regulation. In particular, Basel II added two new "pillars" - supervisory review (pillar 2) and market discipline (pillar 3) - to the single pillar of minimum capital requirement of Basel I. In response to public comments, the Committee revised its proposal twice and issued a third consultative paper (CP3) in early 2003. If approved, the proposed standards are scheduled for implementation in most countries at the beginning of 2007. In preparation, in August 2003, U.S. ...Show more

Summary

The rules of Basel I for calculating risk weighted assets are said not to reflect the true economic risk of a transaction in its entirety, but only to a limited extent. Under the Basel 1, a corporate exposure with a high rating and low risk attracts the same credit risk weighting as a corporate exposure with a low rating and a high risk1.
Author : roslyn71
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Banking"
with a personal 20% discount.
Grab the best paper

Related Essays

Nigerian Banking
This is one of the major reasons for initiating acts various cases of frauds by managers and illegal business acts due to the non-availability of incentives for them to perform (Caprio, and Klingebiel, 1996). . As the performance of banks are almost obscure in comparison with any non-financial firms unless the banking operations are more information intensive their state of business cannot be easily gauged Banks could often hide their problems by neutralizing the bad loans with increased deposits in the balance sheet, future payback promises etc.
8 pages (2000 words) Thesis Proposal
Investment banking & private banking
Economic development involves the improvement in the standards of living also referred to as economic wealth of a certain city, country or region to create a better habitat for its citizens. It involves the movement of the country's economy from a low-income economy to a modern day, high income economy, (Heyn, 1981).
15 pages (3750 words) Essay
Banking
The bank’s net liabilities worth £1.3 billion was nearly twice that of its investment capital, a figure large enough to capsize its entire assets, cause job losses to over 1200 employees and subsequently,
10 pages (2500 words) Essay
Relationship banking
Gummesson (1995) held the view that relationship marketing/management is more often focussed on one-to one relationships and less on mass marketing and that its core is based on what is mutually beneficial where supplier and buyer remain satisfied. It is also important to
6 pages (1500 words) Essay
Banking finance
ttp://books.google.com/books?id=plbBqZ9WIbUC&pg=PA67&dq=banking+and+emerging+markets+and+financial+crisis&hl=en&ei=EOiRTO-CMI_eOMHfuYsH&sa=X&oi=book_result&ct=result&resnum=2&ved=0CDUQ6AEwAQ#v=onepage&q=banking%20and%20emerging%20markets%20and%20financial%20crisis&f=false http:/
10 pages (2500 words) Essay
Islamic banking
Islamic banks prohibit the collection of interest on grounds that money should not be treated as a commodity that can generate profits. The rules that guide Islamic banking tend to be based on certain ethical principles,
3 pages (750 words) Essay
Find out how much would it cost
to get a custom paper written by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT