The Accord in Operation
Basel II uses a "three pillars" concept – (1) minimum capital requirements (addressing risk), (2) supervisory review and (3) market discipline.
The Basel I accord dealt with only parts of each of these pillars. For example: with respect to the first Basel II pillar, only one risk, credit risk, was dealt with in a simple manner while market risk was an afterthought; operational risk was not dealt with at all.
Read more about this topic: Basel II
Other articles related to "the accord in operation":
... Market discipline supplements regulation as sharing of information facilitates assessment of the bank by others, including investors, analysts, customers, other banks, and rating agencies, which leads to good corporate governance ... The aim of Pillar 3 is to allow market discipline to operate by requiring institutions to disclose details on the scope of application, capital, risk exposures, risk assessment processes, and the capital adequacy of the institution ...
Famous quotes containing the words operation and/or accord:
“It requires a surgical operation to get a joke well into a Scotch understanding. The only idea of wit, or rather that inferior variety of the electric talent which prevails occasionally in the North, and which, under the name of “Wut,” is so infinitely distressing to people of good taste, is laughing immoderately at stated intervals.”
—Sydney Smith (1771–1845)
“I see this evident, that we willingly accord to piety only the services that flatter our passions.”
—Michel de Montaigne (1533–1592)