Basel II's New Standardized Approach: Possible Effects of Implementation
Basel II’s New Standardized Approach: Possible Effects of Implementation Katherine Wyatt New York State Banking Department Abstract The New York State Banking Department surveyed 33 institutions in 2001 and 2002 for a study of the possible effects of the Standardized Approach of the proposed New Capital Accord. Previously, the BIS Quantitative Impact Studies have focused on internationally active banks; this study provides information on the possible impact of the New Accord on domestic banks with asset size between $1 billion and $40 billion. These institutions are often grouped with community banks. The Department found that implementation of the most recent version of the Standardized Approach could lead to an average decrease of 7% in required capital for credit risk, but adding the proposed operational risk charge could bring the total capital charge on average to an increase of 12%. In addition, the estimated impact of the New Standardized Approach varies widely across institutions in the study: the change in minimum capital required for credit risk ranges from a decrease of 23% to an increase of 6%. The Basic Indicator charge for operational risk ranges from 5% of minimum regulatory capital for one savings bank to 83% of minimum required capital for a specialty bank. In this paper, we present a breakdown of the effects of the various elements of the proposed Standardized Approach, and consider a modified approach. We also analyze Call Report data for the survey banks to determine their “complexity profile” and review possible changes to their capital ratios.
Regulation of Bank Capital and Behavior of Banks: Assessing the US and the EU-15 Region Banks in the 2000-2005 Period
In recent years, regulators have increased their focus on the capital adequacy of banking institutions to enhance their stability, hence the stability of the whole financial system. The purpose of this paper is to assess and compare how American and European banks adjust their level of capital and portfolio risk under capital regulation, whether and how they react to constraints placed by the regulators. In order to do this, we estimate a modified version of the simultaneous equations model developed by Shrieves and Dahl. This model analyzes adjustments in capital and risk at banks when they approach the minimum regulatory capital level. The results indicate that regulatory requirements have the desired effect on bank behavior. Both American and European banks that are close to minimum requirements simultaneously increase their capital. In addition, the US banks decrease their portfolio risk taking.
The Handbook of Nanotechnology: Business, Policy, and Intellectual Property Law
Acknowledgments. Foreword. Introduction. Part I: Introduction to Nanotechnology. Chapter 1: Understanding Nanotechnology. Chapter 2: The Industrial Structure Giving Rise to Nanotechnology. Part II: Nanotechnology Policy and Regulation. Chapter 3: Societal and Ethical Implications. Chapter 4: Environmental Regulation. Chapter 5: The Patent and Trademark Office. Chapter 6: FDA Regulation. Chapter 7: National Security and Export Controls. Chapter 8: Federal Funding. Chapter 9: Conclusions. Part III: Nanotechnology Business. Chapter 10: Starting a Nanotech Company. Chapter 11: Business Plans and Strategy. Chapter 12: Early Stage Financing. Chapter 13: Intellectual Property. Chapter 14: Corporate Partnering and Globalization. Chapter 15: Consolidation and Standardization. Chapter 16: Exit Opportunities. Chapter 17: Conclusions. Notes. About the Authors. Index.