The New Basel Accord: some potential implications of the new standards for credit risk
AbstractThis paper discusses some potential implications – both intended and unintended – of The New Basel Accord, which is to be finalized by the end of 2001. Our focus is on the reforms of the rules for determining minimum capital requirements for credit risk. The discussion is divided into effects at the level of an individual bank, effects on the structure of the financial markets, and macroeconomic implications. We present a survey of potential effects rather than a profound analysis of any of them. Therefore conclusions are inevitably preliminary, and in many cases they are likely to be controversial. Although the new capital accord as a whole is a major improvement on many properties of the current framework, our aim is to find potential problems that might need to be considered in the implementation and application of the new rules. Overall, the new accord will be largely an experiment, of which many of the consequences remain to be seen.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Bank of Finland in its series Research Discussion Papers with number 2/2001.
Length: 23 pages
Date of creation: 03 Mar 2001
Date of revision:
capital adequacy requirements; credit crisk; banking stability;
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Saarenheimo, Tuomas, 2001. "Should unemployment benefits decrease as the unemployment spell lengthens?," Research Discussion Papers 23/2001, Bank of Finland.
- Diemo Dietrich & Uwe Vollmer, 2004.
"Why do banks hold capital in excess of regulatory requirements? A functional approach,"
- Diemo Dietrich & Uwe Vollmer, 2004. "Why do banks hold capital in excess of regulatory requirements? A functional approach," IWH Discussion Papers 192, Halle Institute for Economic Research.
- David T. Llewellyn, 2001. "A regulatory regime for financial stability," Working Papers 48, Oesterreichische Nationalbank (Austrian Central Bank).
- W. Bolt & A.F. Tieman, 2001.
"Banking competition, risk and regulation,"
DNB Staff Reports (discontinued)
70, Netherlands Central Bank.
- Alexander F. Tieman & Wilko Bolt, 2004. "Banking Competition, Risk, and Regulation," IMF Working Papers 04/11, International Monetary Fund.
- W. Bolt & A. F. Tieman, 2001. "Banking competition, risk, and regulation," WO Research Memoranda (discontinued) 647, Netherlands Central Bank, Research Department.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Minna Nyman).
If references are entirely missing, you can add them using this form.