Evaluating the policy implications of the other two pillars of Basel II

It reviews and critiques their fundamental features and reaches three conclusions. First, the supervisory-process pillar provides too much scope for supervisory discretion and almost no support for a rules-based approach to regulation that arguably would be much more effective in promoting bank safety and soundness. Second, the market-discipline pillar's information-disclosure guidelines represent a useful first step for many nations with less-developed banking systems, but these costly guid

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