A robust framework for risk management

摘要

Possibly the greatest challenge in banking regulation is to ensure that fundamental changes in the structure of financial markets are accompanied by upgrades in risk management, regulation and supervision. Basel I served us well for many years but ultimately failed to keep pace with an increasingly complex financial environment. Basel II takes a major step towards setting the right incentives. Its minimum capital requirements are more risk sensitive, it better captures all different types of risk, encourages sound risk management practices and enhances market discipline. And, it is able to adapt to rapid financial innovation over time.