Free Accounting Dissertations - The Committee Does No Possess Any Authority Over Its Member Nations Banking
The committee does no possess any authority over its member nations banking systems and the decisions of the committee are never intended to have a legal force on its member nations.
The Central bank governors of the Group ten countries endorse the committee’s major initiatives. Also the committee reports to the group ten countries central bank governors. The committee first proposed he capital measurement system in 1988 commonly referred to as ‘Basel Capital Accord’. The committee aims in supervising the international banking operations of the nations across the globe. The decisions of the committee endorsed by the group ten countries address various financial issues in the international market outside the groups as well.
The major aim of the committee is the ‘close the gaps in international supervisory coverage’ and to ensure that no foreign banking systems escapes the supervision in order to establish a harmony among the member nations of the Bank for International Settlements as well as in the international market.
The committee has promoted supervisory standards in the past few years. Some of its major milestones include the following
1997: Cover Principles for effective banking supervision
1999: Core Principles methodology
The committee also presented the Basel II accord with revision on international capital framework. This aims to standardise the capital framework of every bank participating in the international banking as well as sets slabs for minimum capital holdings to be met by the banks in order to qufy for international operations.
The committee has numerous subgroups to perform specific tasks of the committee in order to achieve the overall motto of the committee. They are listed below
Accord Implementation Group
Accounting Task Force
Capital Group
Capital Task Force
Core Principles Liaison Group (with 16 non-G10 countries)
Cross-Border Banking Group
Electronic Banking Group
Joint Forum (with IAIS and IOSCO)
Joint IOSCO - BCBS Working Group on Trading Book
Research Task Force
Risk Management Group
Securitisation Group
Transparency Group
The next section provides a detailed analysis of the Basel II accord and its various implications on international banking is discussed in chapter 3.
2.3 The Basel II Accord
The Basel II accord was released in June 2004 further to the release of the Basel Accord in 2003. The Basel II is a revised edition of the initial Basel capital accord. It is a framework designed to derive the capital holdings of internationally active banks to meet the international standards and sets a minimum level of capital holding which is a primary criteria for the banks. The Basel II framework is aimed to be applied on a consolidated basis over internationally active banks in order to preserve the integrity of capital in the banks with subsidiaries. Also the framework eliminates the double gearing through this approach.
Dissertations - Free Accounting Dissertations
