| International Convergence of Capital Measurement and Capital Standards (named The New Basel Capital Accord or BaselⅡ) issued on 26th,June,2004 has become the landmark of the history of banking supervision. It greatly contributed for international banking supervision and comprehensive risk management of financial system. But when in summer of 2007, the financial crisis triggered by the subprime mortgage had brought great loss to the international financial industry and exposed the flaw of financial supervision fully. Also, so many advanced banks had a heavy toll which had implemented the BaselⅡ. Then Basel Committee on Banking Supervision had to considerate whether the Basel II had played the role of restraining the crisis and making the banking system stability.From the key reasons of the subprime crisis, besides the macro-economic conditions, financial institution and financial derivatives, the lack of supervision is one of the important causes. Therefore, standing the point of view of supervision, the subprime crisis haven’t been restrained, but expanded and diffused. However, the BaselⅡalso haven’t resisted the subprime crisis effectively. Thus, we clearly bring forward that the BaselⅡis short of validity for the subprime crisis. For example, having not kept away from high leverage management, having been lack of supervision for liquidity risk, credit rating agency and so on. At the same time, I incorporate the relevant revised documents issued by Basel Committee, analyze inherent shortcomings and limitations by the understanding of myself. And try my best to set forth the refining advices for the BaselⅡ. Such as, strengthening the limitations for leverage ratio, bringing the investment banks and hedge fund into range of supervision, enhancing the controlling and attention of liquidity risk and system risk, reinforcing the usage of stress testing and IRB and so on.Besides, although we carry out the BaselⅡjust from the end of 2010, banking in China has much great gap from banking of advanced countries. Now, we mainly focus on capital adequacy ratio, IRB and stress testing. We haven’t so many businesses of high leverage products and financial derivatives. We can absorb the lessons from the subprime crisis, and combine the current situation of our banking industry——traditional businesses and undeveloped financial derivatives market——and the future trend of developing, the character of banking supervision, on the base of wholly understanding of the BaselⅡto discuss the persistent way of implementing the BaselⅡunder the subprime crisis. Meanwhile, I combine the requests of Basel III, considering our banking system and internal and external elements, to provide myself point of view with problems which we need to improve and pay attention during implementing the BaselⅡ. Facing the opportunity and challenge, step by step, I discuss how to maintain the quality and quantity of capital, how to expand or provide more ways to increase the core capital; greatly using of the stress testing in China; advantages and disadvantages of implementing IRB, include problems which need to improve quickly; drawing into economic capital model innovatively, and enhancing the comprehensive risk management of our banking. At the same time, integrating the theory and practices of our banking industry, I deepen the core theme of this passage, and hope to help the utility of the BaselⅡbrought into play more and more in our banking industry. |
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