Fed's Gordy criticises Basel II procyclicality adjustment

NEW YORK - The procyclicality ‘smoothing’ adjustment technique likely to form part of the Basel II capital Accord is sub-optimal, according to Michael Gordy, a senior economist in the research and statistics division of the Board of Governors of the Federal Reserve System.

Gordy, speaking in a personal capacity during his keynote address to Risk’s Credit Risk Summit 2002 USA in New York today, said while he favoured smoothing regulatory minimum capital as a means of dealing with the problem of procyclicality, he did not believe altering the advanced risk-based model approach – as currently favoured by the Basel Committee on Banking Supervision, the body overseeing the implementation of Basel II – was the best solution. Procyclicality is a term used to describe

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Register

Want to know what’s included in our free membership? Click here

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here