Countries cannot ignore their financial and banking sectors. Failures in the banking system can be very costly, especially for the developing countries. Its occurrence and recurrence must be prevented at all times and at all costs. A trial-and-error system should never be resorted to…
The Committee on Banking Regulations and Supervisory Practices (Basel Committee) was established in 1974. The Committee was comprised of the central bank Governors of the Group of Ten countries. These countries in particular are Belgium, Canada, France, Germany, Italy, Japan, Luxembourg, the Netherlands, Spain, Sweden, Switzerland, the United Kingdom and the United States. The repercussions of the turmoil in markets and international currency created the need for this congregation. The Basel Committee was tasked to oversee and supervise financial institutions and to issue recommendations and standards on banking laws and regulations. It serves as the forum for cooperation on sound banking practices for member countries.
In 1988, the Basel Committee gave birth to Basel Capital Accord, or the 1988 Accord. The 1988 Accord was to serve as the international standard to be followed by financial institutions. This has come to be known as a stabilising instrument in banking institutions that foster cooperation among participating countries. The aim of the 1988 Accord was to give a new framework that will strengthen the stability of the banking system and to make sure that the framework will be fair and consistent in application to various banks to reduce inequality among international banks. It provided a system for capital measurement and stated the minimum requirements for international banking business. The most significant aspect of the 1988 Accord is the provision imposing a regulatory capital requirement. It required the minimum capital-to-asset ratio of financial institutions to equal to at least eight percent (8%) of the risk-weighted assets. Thus, if all of the institutions assets are exposed to 100% risk, then its capital at hand must be valued at least 8% of its assets. The changes in the 1988 Accord were proposed in 1999. The proposal aims to formulate a capital framework that has evolved to the needs of the time. Thus, the International Convergence of Capital Measurement and Capital Standards: A Revised Framework or the Basel II Accord came upon in June 2004.
Core Principles for Effective Banking Supervision
A remarkable benchmark was made through the Core Principles for Effective Banking Supervisions or the Basel Core Principles. The Basel Core Principles aim to respond to the weaknesses in the banking systems that can threaten countries, regions and even the international community. This document was issued on September 1997 after examinations and studies made by the Basle Committee, the Bank for International Settlements, the World Bank and the International Monetary Fund. Compared to the 1988 Accord, many developing countries participated in the drafting of the Basel Core Principles, like Chile, Thailand, China, Argentina, Brazil and India among others.
The Basel Core Principles are made of 25 basic Principles that are supposed to guide the regulatory or public authorities in the countries into implementing or maintaining an effective financial system. These 25 basic Principles are classified into seven sections. Principle 1 deals with the Preconditions for Effective Banking Supervision. Principles 2 to 5 discuss the Licensing and Structure. Principles 6 to 15 break down the Prudential Regulations and Requirements that are suppose ...
Cite this document
(“Basel Core Principles on Developing Countries Essay”, n.d.)
Retrieved from https://studentshare.net/politics/286654-basel-core-principles-on-developing-countries
(Basel Core Principles on Developing Countries Essay)
“Basel Core Principles on Developing Countries Essay”, n.d. https://studentshare.net/politics/286654-basel-core-principles-on-developing-countries.
According to the research findings it can therefore be said that globalization is beyond control and thus it should be embraced. The extensive interactions of people between different cultures lead to pluralization. This means that people practice many cultures thus enhancing international cohesion.
The country is ruled by a distinct party known as Communist Party and Beijing is its capital metropolis, which is highly populated. The country covers about 9.6 million per square kilometer and it has become one of the second largest nations by geographical region.
Diabetes is considered as the disease of modern civilization as more and more people are suffering from this disease. Though the overall causes of diabetes may be different, the increase in the overall incidences of diabetes suggests that it is fast becoming an important public health issue. Diabetes means the blood glucose or blood sugar level is too high.
Sociology recognizes that each individual person is the owner of their own life and has the right to live it fully to their on personal manner and long as he doesn't dictate or violate others. The Developing countries South had a social system, which was distinct in many ways.
In the first phase of this introduction, there is needs to know that these countries that are called the Developing nations have consist of two third of the whole world, they are also found in parts of the word like in Latin America, Africa and Asia. Developing countries a feature also shows that they depend largely on foods supply from other nations depend on foreign wealth.
According to the report industrialised nations like America or the majority of the nations comprising the EU have gotten used to a certain level of quality production which developing nations may not be able to create in certain specialised products. The populace has a higher standard of living than those in the developing nations.
et of rules that could be acceptable to all as the multitude of nations also represent a multitude of conditions that could make a guideline acceptable for some but detrimental to others. Nevertheless, it doesn’t stop us from trying to establish one.
One such example of an
This is evident from the analysis of 15 Jordan banks, listed on Amman Stock Exchange. The factors that have been taken into consideration include, provision of credit facilities to direct credit facilities, return on equity, increase in the capital
They are keenly involved in political aspects that are affecting their livelihood in a direct way. The urban poor are also responsive to varying parameters where they are in operation; they are aware of their position of
2 Pages(500 words)Essay
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Let us find you another Essay on topic Basel Core Principles on Developing Countries for FREE!