BASEL
II
In view
of the above, the G10 countries asked the BASEL Committee to review
the prudential framework; for simplicity the resultant work in progress
is named as BIS/BASEL II accord.
The new
architecture of BIS/BASEL II accord consists of three chapters.
|
The
First Pillar
|
| Deals
with risks i.e. minimum capital requirements |
| The
Second Pillar |
| Regulates
the relationship between the financial sector and supervisory
bodies. |
| The
Third Pillar |
| Covers
the transparency of the information published by banks i.e. the
market discipline |
The First
Pillar is the mainstay of the accord and affects risk, consequently
capital adequacy for bank. It is further divided into three parts,
