Credit risk measurement under Basel II : an overview and implementation issues for developing countries
AbstractThe objective of this paper is to provide an overview of the changes in the calculation of minimum regulatory capital requirements for credit risk that have been drafted by the Basel Committee on Banking Supervision (Basel II). Even though the revised credit capital rules represent a dramatic change compared to Basel I, it is shown that Basel II merely seeks to codify (albeit incompletely) existing good practices in bank risk measurement. However, its effective implementation in many developing countries is hindered by fundamental weaknesses in financial infrastructure that will need to be addressed as a priority.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 3556.
Date of creation: 01 Apr 2005
Date of revision:
Banks&Banking Reform; Banking Law; Insurance&Risk Mitigation; Financial Intermediation; Economic Theory&Research;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-12-14 (All new papers)
- NEP-DEV-2005-12-14 (Development)
- NEP-FIN-2005-12-14 (Finance)
- NEP-FMK-2005-12-14 (Financial Markets)
- NEP-REG-2005-12-14 (Regulation)
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