Capitalising on Basel II (TT Jun04 p47-48)

All banks are required to hold capital which varies in accordance with their business. Since 1988, when the original Basel Capital Accord was agreed, there has been broad convergence in most countries, with the Basel standards being adopted in over 100 countries. But despite its past success, the Basel methodology is now considered by many as out-of-date, and no longer capable of accurately capturing the risks involved in bank lending.