However, we are still far from capital adequacy, external rating, internal rating and operational risk management which are set up in The New Basel Capital Accord.
Chapter 2 defines the concept of bank failure, and analyses the reason on the bank failure from the inherent unstability with the banking system, market structure/power, corporate governance, bank efficiency, etc.
Thirdly, since the new Basel Accord is a unified standard internationally, there could be some problems with China in adoption since China is still a developing country with an immature banking system.
This paper synthesizes the credit grade dividing standards of some domestic commercial banks and foreign credit rating organization, and divides the comprehensive appraisal results of BSC grading method into 10 grades, which each corresponds to the five-grade classifying of Chinese People Bank loan and the bond rates of outside rating organizations (such as Standard & Poor and Moody ), make the credit rating results available.
As an example, the process pattern credit assessment is decomposed again, namely into the process patterns internal and external rating and decision.
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If no external rating is available, banks have to employ an internal rating system and deduce each client's specific risk class.
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Then, an external rating agency is consulted in order to verify customer creditworthiness.
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Then, an external rating agency is consulted in order to verify customer credibility.
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We will submit existing working papers on multi-bank loan pool contracts and internal >amp; external rating systems to refereed academic journals.
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In its 2001 proposal for a new Accord, the Basle Committee seeks to introduce different equity ratios for customers of different risk levels instead of the fixed level of 8% . The proposal introduces internal risk management system and internal rating for equity requirement. Due to profit -maximizing object, commercial banks have no incentives to truthfully reveal their diagnosis results. According to this situation, the paper builds a model to analyze relationship among internal ratings; fine imposed by th...
The paper studies about the credit rating questions in the New Basle Capital Accord including internal rating and external rating, facility rating and issuer rating, as well as the relations between loan classification and facility rating. The authors explore the theoretical fundaments of the loan classification, and the methodologies of transferring credit classification into facility rating.
This article introduces the main innovated contents of the New Basel Capital Accord,analyzes the impact on our banking industry after its implementation and puts forward some countermeasures as the following: first,actively attracting foreign strategic investments in Sino-funded banks to improve the quality of capital;second,establishing the subsidiary capital system and widening its raising channel;third,setting up and perfecting the external ratings-based system;fourth,standardizing the information exposu...