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Banking Supervision in Europe: From Basel I to Basel II

  • Hartmut Bieg
  • Gregor Krämer

Abstract

Since the beginning of the 80s the Basel Committee on Banking Supervision (the Committee) has been dealing with the creation of a framework to measure capital adequacy on a multinational scale as a guideline for an appropriate capital level of internationally active banks. It was initiated because of an alarmingly low level of capital which was held by the most important banks worldwide. The aim of the Committee was not only to guarantee an appropriate capital level for the banking industry as a contribution to improve the safety and soundness of national and international banking and finance systems. At the same time the framework aimed at eliminating the disadvantages in competition between banks, which resulted from the different capital requirements of different states (see Basel Committee on Banking Supervision 1988, par. 3). The results of the Committee’s work were summarised by the so-called “International Convergence of Capital Measurement and Capital Standards” (also known as “Basel Capital Accord”, “Basel Capital Adequacy Framework”, “Basel Accord”, “1988 Accord”, or in short “Basel I”) in 1988. Basel I became effective as of year-end 1992 and has had a substantial influence on the corresponding European Union’s Directives ever since. This is the reason why the Basel Accord may be seen as a basis for German banking supervisory regulations e.g. principle 1 concerning the capital of institutions.

Keywords

Credit Risk Regulatory Capital Market Risk Capital Adequacy Capital Level 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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References

  1. Basel Committee on Banking Supervision (1988): Internationale Konvergenz der Eigenkapitalmessung und Eigenkapitalanforderungen, Verlautbarung vom Juli 1988, updated on 07.04.1998, Basel.Google Scholar
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  4. Basel Committee on Banking Supervision (2001b): Die Neue Basler Eigenkapitalvereinbarung, 2. Konsultationspapier vom Januar 2001, Translation of the Deutsche Bundesbank, Basel.Google Scholar
  5. Bieg, H.; Krämer, G.; Waschbusch, G. (2003): Bankenaufsicht in Theorie und Praxis, Frankfurt a.M.Google Scholar
  6. Deutsche Bundesbank (2001): Die neue Baseler Eigenkapitalvereinbarung (Basel II), in: Monatsbericht April 2001, Frankfurt a.M., pp. 15–44.Google Scholar
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Copyright information

© Betriebswirtschaftlicher Verlag Dr. Th. Gabler | GWV Fachverlage GmbH, Wiesbaden 2006

Authors and Affiliations

  • Hartmut Bieg
  • Gregor Krämer

There are no affiliations available

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