Basel II backlash

Credit Risk

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Criticism of the Basel II capital rules is nothing new, but most of the flak has been directed at technical wrinkles and methodological nuances. The liquidity crisis has changed that. Now, for the first time since it was proposed in 2001, the bedrock of the new Accord is being attacked. Critics charge that Basel II takes aim at the wrong targets, that it is too prescriptive, that it will do nothing to prevent bubbles inflating and little to make the financial system more resilient. Even before t

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