June 2015
Beginner
368 pages
9h 49m
English
book
Foundations of Financial Risk: An Overview of Financial Risk and Risk-based Financial Regulation, 2nd Edition
by GARP, Richard Apostolik, Giacomo Indiveri, Christopher Donohue
Content preview from Foundations of Financial Risk: An Overview of Financial Risk and Risk-based Financial Regulation, 2nd Edition
Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
O’Reilly covers everything we've got, with content to help us build a world-class technology community, upgrade the capabilities and competencies of our teams, and improve overall team performance as well as their engagement.I wanted to learn C and C++, but it didn't click for me until I picked up an O'Reilly book. When I went on the O’Reilly platform, I was astonished to find all the books there, plus live events and sandboxes so you could play around with the technology.I’ve been on the O’Reilly platform for more than eight years. I use a couple of learning platforms, but I'm on O'Reilly more than anybody else. When you're there, you start learning. I'm never disappointed.I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.
CHAPTER 8 Regulatory Capital and Supervision
The Basel Accords aim to maintain the stability of the international banking industry by setting international standards for capital adequacy and, in the case of the most recent accord, for liquidity.
The first Basel Accord set a minimum standard for risk-weighted capital adequacy and provided a simple methodology for calculating it. The Basel II Accord introduced a three-pillar framework for assessing capital adequacy. Under Pillar 1 of Basel II, Basel I's measurement of risk-weighted capital was increased in scope and made more sensitive (and more complicated). Basel II increased the minimum capital requirements by including operational and market risk alongside credit risk within the scope of Pillar 1.
Pillar 2 introduced the concept of supervisory review, under which bank supervisors would review how a bank was calculating its capital ratios and assess the adequacy of that process. Under Pillar 2, the supervisor can require a bank to hold more capital than the regulatory minimum specified under Pillar 1.
Pillar 3 introduced the concept of market discipline. Under Pillar 3, banks are required to disclose significant amounts of information about the risks they face and the capital they hold, on the assumption that with that information available, market participants will form an opinion on a bank's capital adequacy.
Basel III retains the three pillars introduced by Basel II and also the requirement to hold capital against credit, ...
Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Read now
Unlock full access
More than 5,000 organizations count on O’Reilly
O’Reilly covers everything we've got, with content to help us build a world-class technology community, upgrade the capabilities and competencies of our teams, and improve overall team performance as well as their engagement.Julian F.
I wanted to learn C and C++, but it didn't click for me until I picked up an O'Reilly book. When I went on the O’Reilly platform, I was astonished to find all the books there, plus live events and sandboxes so you could play around with the technology.Addison B.
I’ve been on the O’Reilly platform for more than eight years. I use a couple of learning platforms, but I'm on O'Reilly more than anybody else. When you're there, you start learning. I'm never disappointed.Amir M.
I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.