What are the pillars of Basel 2?
The accord in operation: Three pillars. Basel II uses a “three pillars” concept – (1) minimum capital requirements (addressing risk), (2) supervisory review and (3) market discipline. The Basel I accord dealt with only parts of each of these pillars.
What are Basel 2 norms?
Basel II is an international business standard that requires financial institutions to maintain enough cash reserves to cover risks incurred by operations. The Basel accords are a series of recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision (BSBS).
What are Pillar 2 requirements?
Basel regulation has evolved to comprise three pillars concerned with minimum capital requirements (Pillar 1), supervisory review (Pillar 2), and market discipline (Pillar 3). Today, the regulation applies to credit risk, market risk, operational risk and liquidity risk.
How many Basel Accords are there?
The Basel Accords are three series of banking regulations set by the BCBS. The accords are designed to ensure that financial institutions have enough capital on account to meet obligations and absorb unexpected losses. The latest accord is Basel III, which was agreed in November 2010.