Basel II: The New Basel Capital Accord

The Basel Committee consulted on a proposal for a new Basel Capital Accord, designed to replace the 1988 Accord. The proposed new Accord, summarised in an accompanying explanatory note, is based on three mutually reinforcing pillars that allow banks and supervisors to evaluate properly the various risks that banks face: (1) minimum capital requirements, refinining the measurement framework in the 1988 Accord; (2) supervisory review of an institution's capital adequacy and internal assessment process; and (3) market discipline, through effective disclosure to encourage safe and sound banking practices. 

The consultative package comprises three parts: 

• The Overview of the New Basel Capital Accord, which discusses the rationale for the key components of the new framework. It provides an explanation of the structure of the proposals and identifies particular areas where the Committee seeks input. 
• The New Basel Capital Accord sets forth the detailed proposals. 
• A package of supporting documents that provide background information and technical details regarding the underlying analysis of the proposals. 

Supporting documents

• The Standardised Approach to Credit Risk
• The Internal Ratings-Based Approach
• Asset securitisation
• Operational Risk
• Pillar 2 (Supervisory Review Process)
• Principles for the Management and Supervision of Interest Rate Risk
• Pillar 3 (Market Discipline)