Basel II Norms: Implications on Business

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Financial institutions pave their way towards success through effective risk management techniques. Investments in state-of-the-art operational practices, reliability, confidentiality, safety measures and consistency in the execution of services, reap rich rewards. Integrating elements such as bank-level management, operational supervision and market discipline are some ways through which effective risk management strategies can be implemented. Basel I guidelines on banking supervision are being introduced by the Basel Committee, since the year 1988. In 1999, a new Capital Adequacy Framework was issued to replace Basel I. This revised framework, named Basel II, was introduced on June 26, 2004. Basel II aims to modernize the existing capital requirements framework in order to make it even more comprehensive and risk-sensitive, for modern-day financial institutions that employ meticulous risk management practices. The Basel II framework is even more sensitive to the real risks that organizations face. It not only considers how much money the organization controls, but also considers the operational risks, like the risk of systems breaking down or people committing unlawful acts. Although the Basel Committee is not a formal regulatory authority, it has influence over bank supervising authorities in many countries. It is expected that in the coming years, the Committee will be able to establish mutual approaches and standards amongst its member countries, as it gains their collaboration over primary objectives, without attempting a comprehensive harmonization of each member country’s supervisory techniques. This book discusses the impact and implications of Basel II on financial organizations and economies. This is an informative contribution, as it is a collection of various articles compiled together, with the objective of giving a comprehensive picture of progress that can be achieved in the financial sector by adopting sophisticated risk management strategies.

ABOUT THE AUTHOR Preeti Phuskele

Preeti Phuskele holds a bachelor's degree in Commerce and a master's degree in Business Economics from Indore University. She is currently working as a Consulting Editor at Icfai Business School Research Centre, Pune. Prior to joining Icfai, she worked for various management colleges at Indore and Pune and also as Assistant Manager for an export oriented unit. Her areas of interest include macroeconomics, international economics, and financial industry.

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Bibliographic information

Title
Basel II Norms: Implications on Business
Author
Edition
1st ed.
Publisher
ISBN
8131411669
Length
236p.
Subjects