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A Research On The Challenge And Solution To Chinese Bank Capital Supervision From The New Basel Capital Accord

Posted on:2005-12-24Degree:MasterType:Thesis
Country:ChinaCandidate:Y S ChenFull Text:PDF
GTID:2166360182467849Subject:Economic Law
Abstract/Summary:PDF Full Text Request
New Basel Capital Accord (Basel II) was published by Basel Committee on 26 June, 2004. The New Basel Capital Accord succeeded on some merits of bank capital supervision in old Basel Capital Accord (Basel I) in 1988. It lays emphasis on Minimum Capital Requirements, credit risk control and national risk supervision as Basel I. However, Basel II proposed a more rational approach to evaluate Capital Requirements by integrating Minimum Capital Requirements, extern supervision and market self-discipline, which only depends on Capital Requirements in Basel I. Compared with Basel I, some new evaluation and approaches presented in Basel II can more appropriately meet requirements of current finance market. These achievements aforementioned in Basel Committee is obtained from the experiences of some international bank risk managements, moreover, it also explores the future direction of banking supervision. The aim of the dissertation is to analyze the necessity of the New Basel Accord in Chinese banks based on that the risk-based supervision is still the popular trend for banking development in the world. This research will be done through analysis of the challenges from the Basel II. The dissertation demonstrates that Basel II, as an international economic law, will bring great influence in internationalization trend for Chinese banks. Modern risk management which is included in the Basel II, will help to improve supervision management for Chinese banks. Therefore New Basel Capital Accord is necessary and will be used at last in China. Based on the international bank supervision management system of Basel II, the combination between loosen and tighten management should be dealt with, the banking supervision law system which is proper for China banks should be set up in order to keep away and get rid of the banking risks, improve the supervision management for Chinese banks, promote the development for Chinese banks, and increase the competitive ability. All of these would bring far-reaching results for Chinese banking system. Therefore, a series of suggestion for the legislation of financial supervision in China will be given in this dissertation. This dissertation consists of four parts as following:1. The formation and influence of the 1988 Basel Capital Accord. Firstly, it briefly introduces the importance of Basel Capital Accord. Secondly, it researches the historical development of banking capital supervision. In addition, it carries out an in-depth research about the development of financial discipline; the content of Basel I; the influences of Basel I on banks in the world and so on.2. The formation and content of New Basel Capital Accord. Based on the limit of Basel I, it researches how Basel II forms, the main changes and development of New Basel II and the main three pillars, which are minimum capital requirement, external supervision and market self-discipline.3. The current situation of banking capital supervision. Based on the evolution of capital supervision in Chinese commercial banks, it analyzes the gap of current capital adequacy supervision, conducts an in-depth research on the four problems existing in the legislation of capital adequacy supervision and the challenges which Basel II brings to us.4. The solutions for improvement of Chinese bank capital supervision from the New Basel Capital Accord. Based on current situation in China, it will be suggested that New Basel II should be put into use quickly. In the first pillar, Internal Ratings Based ( IRB) should be the first thing to be considered, the application of Internal Rating Based should be expedited, besides, the operational risk should be brought into the capital supervision, operational risk capital should be prepared step by step. In the second pillar, the uniform banking risk-rating system should be established and perfected soon. In the third pillar, a new market discipline system should be established; the process of information disclosure should be set up and consummated. Finally, a series of solutions which are needed in implementing Basel II will be given.
Keywords/Search Tags:Financial Risk, Financial Supervision, Minimum Capital Requirements, The Basel Capital Accord
PDF Full Text Request
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