Financial Stability Review
Regulatory Structure Articles
1997
2005 2004 2003 2002 2001 2000 1999 1998 1997
Global
Institutions, National Supervision and Systemic Risk
(129k)
(Issue 3, Autumn 1997)
This article reports on a study by the Group of Thirty - a Washington-based body of academics, bankers and government officials - into the management and supervision of global financial institutions and the potential for systemic risk. The study made a series of recommendations on the importance of high standards of risk management, independent audit, more meaningful disclosure, strengthening legal standards and a co-ordinated system of international supervision.
The
Pre-commitment Approach to Setting Capital Requirements
(152k)
(Issue 3, Autumn 1997)
This article looks at the pre-commitment approach (PCA) to setting capital requirements for the securities, foreign exchange and commodities trading books of banks, which has been developed by economists at the US Federal Reserve Board as a possible alternative to the Basel standard and Value at Risk (VaR) methodologies. Under the PCA, banks themselves would determine how much capital they needed to back their trading book and would be penalised if losses exceeded this level.
Key Resources
|
Memorandum of Understanding between HM Treasury,
the Bank of England and the Financial Services Authority
Download PDF (50k) |
