The continuing controversy of Basel

Abstract

Looks at how banks, since 1988, have increasingly engaged in transactions to enable transfer to credit risk, to try to achieve better allocations of economic capital. States that the International Swaps and Derivatives Association Inc. (ISDA), believes current reviews of the Basel Accord opens gates to align underlying credit risk in such structures. Proposes that the two regulatory proposals with main interest for investors are: the Bank for International Settlements (BIS) Base, New Capital Adequacy Framework (June, 1999); and the EU Review of Regulatory Requirements (November, 1999); which are broadly consistent – but not the same. Concludes that institutions should begin now in order to ensure the determining policies are in place along with procedures, processes and systems, to create a secure environment.

Citation

Stirk, D. (2000), "The continuing controversy of Basel", Balance Sheet, Vol. 8 No. 5, pp. 8-9. https://doi.org/10.1108/EUM0000000005375