IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Risk management by the Basel Committee: Evaluating progress made from the 1988 Basel Accord to recent developments

Listed author(s):
  • Marianne Ojo

Purpose - This paper not only aims to trace developments from the inception of the 1988 Basel Accord to its present form (Basel II), but also to highlight flaws inherent in the 1988 Accord and Basel II, by way of reference to developments which occurred during the Northern Rock Crisis. Design/methodology/approach - The paper highlights the importance of risks through a reference to the crucial role played by capital adequacy. In drawing attention to the importance of such a role and tracing developments which have taken place since the inception of the 1988 Basel Accord, it explores and analyses efforts of the Basel Committee to address capital measurement problems and assesses the success of such efforts through an illustration of capital measurement problems which still persist. An evaluation is made of the Basel Committee's efforts to address weaknesses of the 1988 Basel Accord through Basel II. Greater in-depth evaluation of the effectiveness of the Basel Committee's efforts are undertaken through reference to developments which occurred during the Northern Rock Crisis, which is complemented by graphs and figures. Findings - Whilst considerable progress has been achieved, the paper concludes on the basis of the principal aim of these Accords and failures of capital adequacy to address problems related to risk, that more work is still required particularly in relation to hedge funds, liquidity risks, and those risks attributed to non-bank financial institutions. Originality/value - The paper not only highlights existing problems with Basel II, as revealed in the aftermath of the Northern Rock Crisis, but also draws attention to other areas which the Basel Committee and regulators need to focus on.

If 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.

File URL:
Download Restriction: Access to full text is restricted to subscribers

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Emerald Group Publishing in its journal Journal of Financial Regulation and Compliance.

Volume (Year): 18 (2010)
Issue (Month): 4 (November)
Pages: 305-315

in new window

Handle: RePEc:eme:jfrcpp:v:18:y:2010:i:4:p:305-315
Contact details of provider: Web page:

Order Information: Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
Web: Email:

References listed on IDEAS
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.:

in new window

  1. Marc Saidenberg & Til Schuermann & May, "undated". "The New Basel Capital Accord and Questions for Research," Center for Financial Institutions Working Papers 03-14, Wharton School Center for Financial Institutions, University of Pennsylvania.
  2. Simona E. Cociuba, 2009. "Seeking stability: what's next for banking regulation?," Economic Letter, Federal Reserve Bank of Dallas, vol. 4(apr).
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eme:jfrcpp:v:18:y:2010:i:4:p:305-315. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.