Credit risk arises from the failure of counterparty to fulfill its contractual obligations. Credit risk can arise both from loan portfolio and investment portfolio. In case of loan portfolio, the risk that bank carries is that of default by the borrower of the loan. If the borrower defaults to repay the entire or some part […]Continue Reading... No Comments.
After the latest financial crisis in 2008-09 which led the whole world into recession, the Basel Committee on Banking Supervision (BCBS) has started working on the Basel II norms to strengthen the financial regulations and supervisory process to protect the financial system from another financial crisis. It also aims to improve the banking minimum capital […]Continue Reading... No Comments.
Basel I had been modified later to Basel II in 2004 to make it more effective to regulate the banks. While Basel I had considered only the credit risk, Basel II has considered other risk factors as well and suggested international standard guidelines to guard all the banks against the same. Basel II has published […]Continue Reading... No Comments.
Basel I is the recommendation set published by central bank heads from G10 (Group of 10) countries in the world in 1988 which provides the norms of minimal capital requirements for Banks. Before publishing Basel II with better risk management, it was the widely used banking regulation guidelines in the world. Basel I was prepared […]Continue Reading... No Comments.
Basal Norms are the banking supervision and regulatory norms published by the Basel Committee on Banking Supervision (BCBS). There are three versions of the Basel Norms like Basel I, Basel II and Basel III; they are called as Basel Accords. Basel norms are widely used in the banking and financial sector across the world because […]Continue Reading... No Comments.