The BIS capital adequacy “rules”: a critique
DOI:
https://doi.org/10.13133/2037-3643/10846Keywords:
Basle Supervisors’ Committee, capital adequacy, risk-asset ratio, risk weightsAbstract
The Basle Supervisors' Committee (BIS) capital adequacy proposals of July 1988 called on the G10 supervisory authorities to ensure that all internationally active banks falling under their jurisdiction observe a minimum 8 per cent risk-asset ratio by the end of 1992. This article presents a critique, not of the general principles of Basle, but of the details that are seen to weaken the value of the agreement. The risk-asset ratio and the derivation of risk weights are considered.
JEL: G21, G32, G28
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