Introduction | Lesson 2: Basel II | TW3421x Courseware | edX

DelftX: TW3421x Credit Risk Management

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An Introduction to
R

Welcome
Week 1:Introduction
Introduction

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Lesson 1: Credit
Risk

Lesson 2: Basel II
Lesson 3: Basel III

Summary

The Sofa

Weekly Discussion

In 1999, the Basel Committee on Banking Supervision (BCBS) released Basel II,
a set of rules for regulating the activities of banks, for example by defining new
risk management practices, and by imposing certain capital requirements.
Basel II was later revised in2001, 2003, 2004 and 2005. The implementation
began in 2007.
The aims of Basel II were/are:
To guarantee a more risk sensitive allocation of capital.
To improve the efficiency and the transparency of markets.
To provide common guidelines for the management of risk.
To reduce regulatory arbitrage among countries, by attempting to make
international regulations more uniform.
In this class, we discuss Basel II, its three-pillar construction and the main
approaches to credit risk in this framework.

https://courses.edx.org/courses/DelftX/TW3421x/1T2014/courseware/1a7163fbf5ac4edd93c17955458bc54b/73dbf2b704984ff183bad77567abeb5d/[4/15/2014 6:20:57 PM]

Introduction | Lesson 2: Basel II | TW3421x Courseware | edX

Many of the concepts we introduce in this lesson (RWA, STA, F-IRB, A-IRB) will
become clearer next week, when we will discuss them in more details.
For the moment, just try to understand the big picture.

[The picture is a view of Basel, Switzerland. CC Nick Georgiev]

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https://courses.edx.org/courses/DelftX/TW3421x/1T2014/courseware/1a7163fbf5ac4edd93c17955458bc54b/73dbf2b704984ff183bad77567abeb5d/[4/15/2014 6:20:57 PM]