Product Description

Takes you through every main strand of Pillar II and looks at the importance of the subject and its main consequences for bank management.

Pillar II complements the black letter requirements of Pillar I and is intended to achieve two objectives: to ensure that banks have adequate capital to support all the risks in their business and to encourage them to use better techniques for monitoring and managing their risks. The second pillar specifically emphasises the need for a qualitative approach to supervising banks. It constitutes an integral part of the new capital accord and ranks equally alongside the minimum capital requirements and the call for market transparency. Pillar II in the New Basel Accord, The Challenge of Economic Capital takes you through every main strand of Pillar II. It tackles the regulatory framework, shows how to reconcile the various regulatory sources and focuses on the following sequence of questions:

• What additional capital is required to support Pillar I risks where the Basel II models do not adequately reflect the unique circumstances of the particular bank?
• What additional capital is required to support risks not captured under Pillar I at all?
• What reduction in capital should be allowed to account for the fact that individual risks may be less than perfectly correlated?
• What further adjustment should be made to counteract procyclical movements in regulatory capital resulting from the Pillar I calculation?
• How should a banking group s economic capital be allocated to its business units and legal entities?
• How will supervisors from different countries interact when assessing Pillar II implementation in international banks?
• How will hybrid capital help in preserving and maintaining the capital adequacy levels dictated by Pillar II?

Pillar II in the New Basel Accord is an indispensable book for any financial practitioner affected by the Basel II accord, including chief financial officers, chief operating officers, chief investment officers, risk managers, credit risk managers, senior compliance officers, and also those working in the fields of operational risk, compliance, regulation, credit, and risk management.

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Product Details

• Amazon Sales Rank: #846540 in Books
• Published on: 2008-12-31
• Original language: English
• Binding: Paperback
• 481 pages

About the Author
Andrea Restiis an associate professor at Bocconi University, Milan, where he teaches financial institutions management and heads the Centre for Applied Research in Finance (CAREFIN). Formerly, he was an officer with one of Italy s largest banks and the managing director of FinMonitor, a research body on bank mergers. Andrea has acted as a scientific coordinator of a wide array of courses on bank management and risk control themes organised for European bank managers and supervisors by SDA Bocconi, the Bank of Italy and the Italian Bankers Association and is a regular speaker at international seminars organised by Incisive Media. In 2002-2004, he was senior rapporteur in the Basel II task force of the Centre for European Policy Studies. He has published in the Journal of Business, Journal of Banking and Finance, Journal of Financial Intermediation and other top journals. Andrea s research interests include risk regulation, management and measurement, concentration risk, economic capital estimation and risk-adjusted performance measurement, bank strategic management. He has published a book with Risk Books.