Credit Risk Measurement Under Basel Ii: An Overview and Implementation Issues for Developing Countries

33 Pages Posted: 20 Apr 2016

Multiple version iconThere are 2 versions of this paper

Date Written: 04/01/2005

Abstract

The objective of this paper is to provide an overview of the changes in the calculation of minimum regulatory capital requirements for credit risk that have been drafted by the Basel Committee on Banking Supervision (Basel II). Even though the revised credit capital rules represent a dramatic change compared to Basel I, it is shown that Basel II merely seeks to codify (albeit incompletely) existing good practices in bank risk measurement. However, its effective implementation in many developing countries is hindered by fundamental weaknesses in financial infrastructure that will need to be addressed as a priority.

Keywords: Banks & Banking Reform, Banking Law, Insurance & Risk Mitigation, Financial Intermediation, Economic Theory & Research

Suggested Citation

Stephanou, Constantinos and Mendoza, Juan Carlos, Credit Risk Measurement Under Basel Ii: An Overview and Implementation Issues for Developing Countries (04/01/2005). World Bank Policy Research Working Paper Series, Vol. , pp. -, 2005. Available at SSRN: https://ssrn.com/abstract=922909

Constantinos Stephanou (Contact Author)

BIS/Financial Stability Board ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

Juan Carlos Mendoza

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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