On The Innovation Of New Basel Agreement On Banking Regulation

The Basel Capital Accord is one of the most successful supervisory regulations. Hundreds of countries adopted the Accord and apply these standards in their supervisory review process. In 2001. the Basel Committee declared the New Basel Capital Accord, the New Capital Accord reflects the advanced risk management standards and thought of the financial supervise. The New Capital Accord is the new international supervisory standards of the bank risk management , it's application will deeply influence the global banking.In the essay, emphasized on the innovations of the banking supervisory standards in the New Basel Capital Accord. Through the comparison of the New Basel Capital Accord and the 1988 Basel Capital Accord , analyze the influence of these innovational standards. There are 3 innovations in the Accord: the first is to improve risk sensitivity, the revision of the standardized approach is the bank can use credit assessments of the export credit agency to decide their risk weight and the banks who has the ability to make use of the IRB framework would use their internal assessments of credit risk for setting their capital charges; the second is operational risk is addressed in the New Basel Capital Accord, in Pillarl it proposes a range of approaches to operational risk; the third is Supervisory Review Process and Market discipline are the first time mentioned in the New Basel Capital Accord, as the supplement of the Pillarl—Minimum Capital Requirements. The three pillars will encourage banks to enhance their risk measurement and management in order to promote safety and soundness in the financial system.Based on these, the thesis analyzed the conditions and the shortcomings of our banking supervision , promote some proposals to the banking supervision in order to perfect the standards of the capital adequacy and risk management capabilities.