The Basel Committee on Banking Supervision has presented its proposals for the New Basel Capital Accord (Basel II) in three Consultative Papers. The third Consultative Paper has just appeared in May 2003. The Committee plans to publish the final version of the new regulations in autumn 2003, while implementation is planned for the end of 2006. The basic thrust of Basel II is to increase the dependency of banks' minimum capital requirements (regulatory capital) on the risk profiles of the loans they have extended. Generally, the new regulations only concern internationally active banks, but all German banks will be obliged to apply them as they are implemented into national law in virtually unchanged form on the basis of corresponding EU directives which extend them to all credit institutions.
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