Unresolved Basel II issues include total capital and economic impact, says UK central banker

A second unresolved issue, he said, is how to ensure that the risk-sensitive Basel II bank capital adequacy rules do not cause movements in bank capital that excessively reinforce cycles in the economy.

The Basel II accord will from 2005 determine what proportion of their assets large international banks should set aside as a reserve to guard against banking risks, including credit and market risks as well as, for the first time, operational risk.

Clementi said overall capital, as with many re

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