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The New Basel Capital Accord And China's Commercial Banks' Capital Management Study

Posted on:2004-05-16Degree:MasterType:Thesis
Country:ChinaCandidate:H L ChenFull Text:PDF
GTID:2206360092490465Subject:Finance
Abstract/Summary:PDF Full Text Request
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 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 choosed 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, imperferction 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 conceratration on Internal Ratings-Based Approaches, and continue to improve the quality of assests and the capability of gaining profits. The article first gives the theoretical interpretations of the birth and development of the Basle Accord. Then, deeply analyse the fundemental 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 confonting them in carrying out the New Basle Accord.
Keywords/Search Tags:The New Basle Accord, commercial bank, capital management
PDF Full Text Request
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