Bank capital and loan loss reserves under Basel II - implications for emerging countries
AbstractThe authors propose an integrated approach to minimum bank capital, and loan loss reserves regulation. They break new ground in two main areas. First, the authors provide an explicit measurement of the credit loss distribution for a sample of emerging countries, providing a benchmark for discussing the appropriate calibration of new regulatory capital, and loan loss provision requirements for non-G10 countries. Second, on normative grounds, they propose a simplified version of the"internal rating based"(IRB) approach as a transition tool that, while retaining a risk-based definition of solvency ratios, implies reduced supervisory monitoring costs, and could therefore be of interest to emerging countries, where supervisory resources are particularly scarce.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 3437.
Date of creation: 01 Oct 2004
Date of revision:
Payment Systems&Infrastructure; Banking Law; Financial Intermediation; Banks&Banking Reform; Insurance&Risk Mitigation; Financial Intermediation; International Terrorism&Counterterrorism; Banks&Banking Reform; Banking Law; Insurance&Risk Mitigation;
This paper has been announced in the following NEP Reports:
- NEP-REG-2004-11-07 (Regulation)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Luc Laeven & Giovanni Majnoni, 2002.
"Loan loss provisioning and economic slowdowns: too much too late?,"
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- Verónica Balzarotti & Christian Castro & Andrew Powell, 2004. "Reforming Capital Requirements in Emerging Countries: Calibrating Basel II using Historical Argentine Credit Bureau Data and CreditRisk+," Business School Working Papers capitalreqemerging, Universidad Torcuato Di Tella.
- Alicia García-Herrero & Sergio Gavilá, 2006. "Posible impacto de Basilea II en los países emergentes," Banco de Espaï¿½a Occasional Papers 0606, Banco de Espa�a.
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