tag:blogger.com,1999:blog-83444127151136537572024-09-08T06:40:59.938-07:00Basel II - Capital AccordSet of regulation formulated by Basel Committee on Banking Supervision, in order to set minimum capital adequacy ratio.Aanchalhttp://www.blogger.com/profile/15853312110256966956noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-8344412715113653757.post-28479219757220087362008-05-14T23:57:00.000-07:002009-12-06T06:55:34.350-08:00Pillar III - Market Discipline
The third pillar of the new framework aims to boost market discipline through enhanced disclosure by banks. Basel 2 identifies the disclosure requirements and provides recommendations both on defining methods for calculating capital adequacy, and risk management strategies.
Effective disclosures by banks help market participants understand the bank’s risk profile and adequacy of their Aanchalhttp://www.blogger.com/profile/15853312110256966956noreply@blogger.com0tag:blogger.com,1999:blog-8344412715113653757.post-39694638879737147022008-05-14T23:45:00.000-07:002009-12-06T06:54:36.442-08:00Pillar II - Supervisory and Review Process
The second pillar of Basel 2 intends to ensure the presence of sound processes at each bank. This pillar would also provide the framework to assess the adequacy of the bank’s capital, based on a thorough evaluation of its risks. The Basel 2 framework emphasizes the development of an internal capital assessment process by the bank management. Additionally, management should set targets for Aanchalhttp://www.blogger.com/profile/15853312110256966956noreply@blogger.com0tag:blogger.com,1999:blog-8344412715113653757.post-77217552979024918472008-05-14T23:25:00.000-07:002009-12-06T06:52:57.558-08:00Pillar I - Minimum Capital Requirement
Designed to help cover risks within a financial institution, the first pillar aims to set minimum capital requirements. It defines the current amount of capital and the minimum capital requirement allocated for risk-weighted assets.
This pillar also stresses on defining the capital amount by quantifying risks such as Credit Risk, Operational Risk and Market Risk.
Measuring Credit Risk
Credit Aanchalhttp://www.blogger.com/profile/15853312110256966956noreply@blogger.com0tag:blogger.com,1999:blog-8344412715113653757.post-49998278943425226462008-05-14T23:09:00.000-07:002009-12-06T06:56:24.957-08:00Risk Management framework by Basel committee
Effective Risk Management is the hallmark of successful financial institutions. Due to the nature of the business, the success of financial institutions depends on the security, privacy, and reliability of services backed by robust operational practices.
Effective risk management strategies can be implemented by integrating effective bank-level management, operational supervision and market Aanchalhttp://www.blogger.com/profile/15853312110256966956noreply@blogger.com0