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Research On New Basel Accord And Capital Adequacy Management Of State-owned Commercial Bank

Posted on:2006-08-22Degree:MasterType:Thesis
Country:ChinaCandidate:L N LiuFull Text:PDF
GTID:2156360152483251Subject:Finance
Abstract/Summary:PDF Full Text Request
The capital adequacy includes two layer meanings. One is the enough capital quantity and the other is the reasonable structure. Following the change of banking environment, the capital adequacy management becomes the important means of banking supervision and important contents of banking internal control. The bank capital adequacy manage appeared in 1970's, the business management of the western commercial bank showed the trend of the internationalization and the relationship among the financial institutions in different countries was closer. The Basle Capital Accord of July 1988 resulted from the discussions and researches of international banking supervision by the Group of Ten after Herstatt Bank of West Germany and Franklin National Bank of America went bankrupt. It transformed the concern of banking supervision from the inside to the outside of banks, integrated the quality of banks capitals into the quality of them by requiring adequate capital in accordance with the risks of their assets, so have deeply influenced the capital adequacy management of commercial banks. Compared with the original Basle Capital Accord, the new one requires the according capital of all risks including credit risk, market risk and operational risk, and puts forward a series of progressive methods of measuring the capital which can be flexibly choused by banks. The New Capital Accord attaches more importance to banks' inside system of assessing risks than to the capital adequacy, and emphasizes the supplementary role of Supervisory Review of Capital Adequacy and Market Discipline. If commercial banks in China meet the requirement of the New Capital Accord, many questions must be solved, including the possible continual worse in capital adequacy, a lot of drawbacks in the current standard of measuring capital adequacy, imperfection in the internal system of assessing risk, and so on. In order to cope with the challenge from the internal and international financial market, commercial banks in China should make full use of the advanced managing experience of international banking, raise capitals by all possible means, make capital structure perfect, set up preliminary system of assessing risks with concentration on Internal Ratings-Based Approaches, and continue to improve the quality of assets and the capability of gaining profits. The article first gives the theoretical interpretations of the birth and development of the Basle Accord. Then, deeply analyze the fundamental content of the New Basle Accord. At last, give full directions to perfect the capital management of the banks in China after discussing the main difficulties confronting them in carrying out the New Basle Accord.
Keywords/Search Tags:The New Basle Accord, State-owned commercial bank, Capital adequacy management
PDF Full Text Request
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