28/5/2010 | TRAINING AND EVALUATION OF INVESTMENT PROJECTS |
PILAR I 7
The calculation of minimum capital requirements 7
PILAR II 9
The process of monitoring equity management …………………………………………………………………………….9
PILAR III 10
Market discipline 10CONCLUSION 11
This paper aims to analyze the main contents specified in agreements Basilea I y II and agreements Pilar I, II y III. Trying to make a contribution to the discussion of a current and important issue for global banking.
The subject is approached from a broad perspective, to understand how to analyze briefly the challenges and opportunities that involvesuch arrangements for banking in emerging countries. The work contains information describing the arrangements, structures and main contents
The growing trend of businesses of any type is occurring at a rapid pace, opening new lines of development and expansion within markets more open and internationalized and becoming more dynamic and competitive business
This being implementedon an accelerated though not without a substantial increase in business risks those need to quantify and deal with protective measures. This scenario is typical not only of business but also affects their own financial activity of the financial system of any country.
Any activity conducted in a framework where risk can charge a significant role in dragging the expectations of profitability andsolvency of companies, require protective measures to ensure business continuity within acceptable risk levels. Financial institutions in developing their activities are subject to multiple risks that should be provided in its internal management and expansion policy.
It's called Group of Ten, G10, the ten most industrialized countries: Germany, Belgium, Canada, United States, France,Britain, Holland, Italy, Japan and Sweden.
In 1975, The Members of the G10 created in the City Basilea, a committee composed of central bank governors in order to standardize the criteria used in the surveillance of international financial institutions in their respective countries. Subsequently, the Committee joined the central banks of Spain and Luxembourg. In those countries wheresupervisory activities are not conducted by the central bank, also attended by national supervisors.
The Basel Committee issued In 1988, the Basel Accords I. These relate to minimum capital that must be a financial institution to hedge its exposure to risk, mainly credit. In 1996 agreements were extended to include market risk. 2000 was set as the deadline for international banks to implement thesemeasures. On June 25, 2004, Jaime Caruana, governor of the Central Bank of Spain and Chairman of the Basel Committee, and Jean Claude Trichet, President of the European Central Bank, presented to the public the Basel II accords, which seek to define new levels capital to support better banking risks. These measures will be operational from December 2006 and taken into account, for the first time,operational risk.
The Basel Committee has worked so far, three types of risk to which banks are exposed: the market, associated with fluctuations in asset prices, the credit associated with the uncertainty in the payment of the obligations of debtors, and the operation, which is associated with the possibility of human error, technology failure, fraud and natural disasters. This list does not coverall types of risk affecting financial institutions.
The Basel Committee considered seven different types of operating losses: internal fraud, external fraud, internal practices, customer practices, damage to physical assets, system failures and, finally, in the administration of banking processes.
Therefore, Basel II Accords represent a challenge for financial institutions to the academy,...