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Is Basel Ii Accord To Guard Against Financial Shocks?

Author

Listed:
  • Mihaela GONDOR

    (Universitatea “Petru Maior” din Tîrgu–Mures Str. Nicolae Iorga, nr.1, Tîrgu – Mures, MURES, 540088, România)

Abstract

The world financial market is an extremely complex system that involves many different participants from local banks to the central bank of each nation and the investors. Due to its importance on the global economy and our everyday lives it is vital that it is functioning properly. Internationally, rules are set by the Basel committee, part of the Bank for International Settlements (BIS). Basel II is the second of the Basel Accords, which are recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision. The objective of Basel II is to modernize the existing capital requirements framework to make it more comprehensive and risk-sensitive, taking account of many modern financial institutions' thorough risk management practices. Basel II is an international business standard that requires financial institutions to maintain enough cash reserves to cover risks incurred by operations.

Suggested Citation

  • Mihaela GONDOR, 2008. "Is Basel Ii Accord To Guard Against Financial Shocks?," STUDIA UNIVERSITATIS PETRU MAIOR SERIES OECONOMICA, Petru Maior University, Faculty of Economics Law and Administrative Sciences, vol. 1, pages 87-104, December.
    • Handle: RePEc:pmu:oecono:v:1/2008:y:2008:p:87-104
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    More about this item

    Keywords

    Basel II Accord; Banking System; Financial Crisis.;
    All these keywords.

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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