New Basel Capital Agreement (Chinese and English)

Basel Committee is1974The group was established at the initiative of the President of the Central Bank of the 10 countries. Its members include representatives of the Central Bank of the 10 countries and the banking regulatory authorities. Since its establishment, the Basel Committee has developed a series of important banking regulatory provisions, such1983Regulatory principles of foreign institutions of banks (also known as Basel Accord,Basel Concordat) And1988Basel Capital Accord (Basel Accord). These provisions are not legally binding, but the regulatory authorities of the group of 10 unanimously agree to implement them within the specified time. After a period of testing, in view of its rationality, scientificity and operability, many non-group regulators also voluntarily abide by the Basel Agreement and the capital agreement, especially those countries with high international financial participation.

1997The advent of the core principles of effective banking supervision is another major event in the history of the Basel Committee. The core principle is the joint drafting by the Basel Committee and some non-10 countries, which has been universally accepted by regulatory agencies around the world and has formed an international standard for banking supervision widely recognized by the international community. So far, although the Basel Committee is not a strictly international organization for banking regulation, it has actually become the maker of international standards for banking regulation.

2002Year10Month1DayThe Basel Committee released the latest version of the proposed change to the capital agreement and started a new round of investigation (the third quantitative impact assessment,Qis3) To assess the potential impact of the recommendation on the minimum capital requirements of banks around the world.

1975Year9The first Basel Accord in the month1999Year6The New Basel Capital agreement (or referred to"Basel Accord") The first draft for soliciting opinions will be published.2006The formal Implementation of the New Year's agreement, with a long time span30Year. Over the past few decades, the Basel Accord has been constantly enriched and its regulatory ideology has been constantly deepened.

Basel Accord

the Basel Committee's work to thoroughly modify the capital agreement began in the year 1998 . 1999 year 6 month, the Basel Committee proposed three pillars: -- capital adequacy ratio, supervision and inspection by regulatory authorities, and market discipline is the first draft of the new capital regulatory framework with major features, solicit opinions from relevant parties extensively.

the new agreement will have an extremely important impact on international bank regulation and the operation methods of many banks. First, you must note that with three elements ( capital adequacy ratio, supervision and inspection by regulatory authorities, and market discipline ) the new protocols with the main characteristics represent the development trend and direction of capital supervision. . Practice has proved that capital adequacy alone cannot guarantee the stability of a single bank or even the entire banking system. Since 1988 the advent of the Capital Accord, regulatory authorities in some countries have already reached different levels, at the same time, these three measures are used to strengthen capital supervision to achieve the goal of stable operation of banks. However, the three elements are organically combined and fixed in the form of regulatory provisions, requiring the regulatory authorities to seriously implement them. This is undoubtedly an affirmation of successful regulatory experience, it is also a major breakthrough in the field of capital supervision.

the annual capital agreement, from the very beginning, the Basel Committee hoped that the new protocol would be applicable not only to the group of 10 countries, but still to the country's " international active banks " ( internationally active banks ). The Basel Committee has suggested that the basic principles of the new capital accord are generally applied to all banks around the world, and it is expected that many banks in non-10 countries will use standard laws to calculate the minimum capital requirements. In addition, the Basel Committee hopes that, after a period of time, all major banks around the world will comply with the new agreement. Objectively speaking, once the new agreement is published, participants in the international financial market are likely to use the new agreement to analyze the capital conditions of banks in different countries, related international organizations will also regard the new protocol as an international standard for new banking regulation, assist the Basel Committee in promoting the new protocol globally and check its implementation. Therefore, developing countries need to carefully study the impact of the new protocol.

And1988Compared with the annual capital agreement, the new capital agreement has a wider and more complex content. This is becauseThe new agreement strives to closely integrate the capital adequacy ratio with the major risks faced by banks and reflect the latest changes in banking risk management and supervision practices, it also provides multiple options for banking and banking regulatory systems with different levels of development. It should be said that the complexity of the banking regulatory system is entirely determined by the complexity of the banking system.Banks in the group of 10 countries will implement the new agreement within the specified time. To ensure its position in international competition, non-group countries will also strive to fully implement the new agreement within the specified time. Compared with developed countries, there is a large gap between the market development and regulatory level of developing countries. The difficulty of implementing new agreements cannot be underestimated. It is also necessary to propose that, for the current scheme, the new agreement is first and foremost an agreement between the countries of the Group of 10, and the national conditions of developing countries have not been fully considered.

The new capital agreement proposedTwo methods to deal with Credit Risk: Standard Method and internal rating method.

annual capital agreement, the standard law uses external rating agencies to determine risk weights, users are banks with low complexity. The adoption of external rating agencies should be said to be more objective and reflect the actual risk level than the classification methods originally based on OECD countries. However, for a large number of developing countries, including China, the objective conditions for using this method do not exist to a large extent. The number of rating companies in developing countries is very small, and it is difficult to meet internationally recognized standards. The number of banks and enterprises with ratings is limited. The cost of rating is high, the results are not necessarily objective and reliable. According to the hardcover standard law, the rating of most enterprises is lower than BBB , the risk weight is 100% , or even 150% ( BB- enterprises below ). Companies are not motivated to participate in the rating, because the risk weight of unrated companies is only 100% . In addition, because of the increase in risk weight and the introduction of capital requirements for operational risks, using this method will naturally increase the capital level of banks.

Applying the Internal Rating Method to capital supervision is the core content of the new capital agreement. This method inherits1996Innovations in the annual market risk Supplemental Agreement allow the use of internal metering data to determine capital requirements. The internal rating method has two forms: the preliminary method and the advanced method. The primary law only requires banks to calculate the borrower's default probability. Other risk factors are determined by the regulatory authorities. The advanced law allows banks to use multiple risk factor values calculated by themselves. To promote the use of the internal rating act, the Basel Committee is2004Year-on-year arrangement3Year.

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