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This system provided for the
implementation of a credit risk measurement framework with a minimum capital
standard of 8% by end-1992. Since 1988, this framework has been progressively
introduced not only in member countries but also in virtually all other
countries with active international banks. In June 1999, the Committee issued a
proposal for a New Capital Adequacy Framework to replace the 1988 Accord. The
proposed capital framework consists of three pillars: minimum capital
requirements, which seek to refine the standardised rules set forth in the 1988
Accord; supervisory review of an institution's internal assessment process and
capital adequacy; and effective use of disclosure to strengthen market
discipline as a complement to supervisory efforts. Following extensive
interaction with banks and industry groups, the Revised framework was issued on
26 June 2004. This text will serve as a basis for national rule-making and
approval processes to continue and for banks to complete their preparations for
the new framework's implementation.
Over the past few years, the
Committee has moved more aggressively to promote sound supervisory standards
worldwide. In close collaboration with many non-G-10 supervisory authorities,
the Committee in 1997 developed a set of "Core Principles for Effective
Banking Supervision", which provides a comprehensive blueprint for an
effective supervisory system. To facilitate implementation and assessment, the
Committee in October 1999 developed the "Core Principles Methodology". A
review of the Core Principles and the Methodology will shortly commence.
In order to enable a wider group of
countries to be associated with the work being pursued in Basel, the Committee
has always encouraged contacts and cooperation between its members and other
banking supervisory authorities. It circulates to supervisors throughout the
world published and unpublished papers. In many cases, supervisory authorities
in non-G-10 countries have seen fit publicly to associate themselves with the
Committee's initiatives. Contacts have been further strengthened by an
International Conference of Banking Supervisors which takes place every two
years. The next ICBS will be held in Mexico in Autumn of 2005.
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