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| Content Provider | Springer Nature Link |
|---|---|
| Author | Herring, Richard J. |
| Copyright Year | 2007 |
| Abstract | This paper contends that the problems US officials have encountered in their efforts to implement Basel II reflect inherent weaknesses in the structure of the approach. It begins with a brief overview of the original Basel Accord on Capital Adequacy (Basel I) and a summary of the Basel II approach, with emphasis on the Pillar I weights for credit risk. Next an analysis of the Fed’s bifurcated approach to implementation of Basel II is followed by an examination of three unanticipated obstacles: (1) perceived competitive inequities within the USA; (2) the surprisingly lower and variable capital charges revealed in the fourth quantitative impact study; and (3) the request by four leading banks for permission to implement the simpler, Standardized Approach rather than the Advanced Internal Ratings Approach (A-IRB). These reflect the erosion of several crucial predeal understandings as described by Kane (J Financ Serv Res 32(1):39–53, 2007a). The paper concludes with a consideration of whether it may have been possible to achieve equivalent improvements in risk management with lower compliance costs and less uncertainty about the impact on financial stability. |
| Starting Page | 411 |
| Ending Page | 429 |
| Page Count | 19 |
| File Format | |
| ISSN | 01974254 |
| Journal | Atlantic Economic Journal |
| Volume Number | 35 |
| Issue Number | 4 |
| e-ISSN | 15739678 |
| Language | English |
| Publisher | Springer US |
| Publisher Date | 2007-11-27 |
| Publisher Place | Boston |
| Access Restriction | One Nation One Subscription (ONOS) |
| Subject Keyword | Basel II Capital regulation Competitive equity Public Finance & Economics International Economics Microeconomics Macroeconomics/Monetary Economics Economics general |
| Content Type | Text |
| Resource Type | Article |
| Subject | Economics, Econometrics and Finance |
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