Financial Stability and Supervision

Dear Unknow Reader:

here some references on payment systems, financial supervision etc.

• http://en.wikipedia.org/wiki/Basel_I


• http://en.wikipedia.org/wiki/Basel_II


• http://en.wikipedia.org/wiki/Capital_requirement

Basel II:

Advocates of Basel II believe that such an international standard can help protect the international financial system from the types of problems that might arise should a major bank or a series of banks collapse. In practice, Basel II attempts to accomplish this by setting up rigorous risk and capital management requirements designed to ensure that a bank holds capital reserves appropriate to the risk the bank exposes itself to through its lending and investment practices. Generally speaking, these rules mean that the greater risk to which the bank is exposed, the greater the amount of capital the bank needs to hold to safeguard its solvency and overall economic stability

The Three Pillars:

1. Minimum Capital Requirements (addressing risk: credit, market, operational)


2. Supervisory Review


3. Market Discipline

The EU adoption of the Basel II Accords.

- Regulatory Capital