Benefits of Basel II

Japan's mega banks adopted the Basel II capital Accord well before the onset of the financial crisis. Despite criticism that the new Accord is too prescriptive and procyclical in nature, Basel II has had some favourable consequences. Christopher Jeffery reports


The Basel II capital Accord has plenty of detractors - many of them in jurisdictions where the rules have yet to be introduced. There are also concerns about Basel II in countries where the new Accord is implemented. And some of this criticism comes from risk managers at financial institutions that are live with the advanced internal ratings-based (IRB) approach to credit risk management and the advanced measurement approach to operational risk. But the censure is more muted.

Risk management

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