Basel’s Bellwether Changes

Basel’s Bellwether Changes

The main objectives of this new accord are to foment safety and soundness in the financial system, enhance the competitive quality of the banks, and include approaches to capital adequacy that are appropriately sensitive to the degree of risk involved in a bank's position and activity. Although the new accord is primarily focused on internationally active banks, it will indirectly impact smaller, less complex institutions. A major theme of the proposed accord addresses minimum capital requirements. Capital, defined as equity that provides a permanent source of revenue for shareholders and funding for the bank for further growth, ratios will remain at a minimum requirement of 8%. Capita

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