Basel II Banking Supervision

Paper Summary:

The paper discusses Basel II that was published in June, 2004 in order to set international standards for banking regulation. The paper examines the effects of Basel II on Europe and the United States and its effect on some developing countries in the Middle East, Egypt in particular. The paper shows how the Basel II accords bring needed transparency and better risk reporting, but have relatively little effect on the emergence of better banking in developing countries.

Outline:
Introduction
Basel I's creation and evolution
Banking in Egypt Prior to Basel II
Economic Changes in the Developing and Developed World
Comparison of Financial Performance
Convergence and Trade with Money-Center and Developing World Financial Institutions
Basel II Main Tenets
Implementation of Basel II
Focus of Basel II Differs from the Focus on Developing Country Financial Systems
Implications for Egypt and Other Developing Countries
Conclusion

From the Paper:

"Basel's committee on banking supervision was established as a response to the changes in world currency in the years leading up to 1974. By that time, the US and Great Britain had decoupled their currencies from gold and silver which had been established in the 1940's, and therefore offered a 'pure' promissory currency. Increases in oil prices in 1974 led to massive transfers of wealth to Middle Eastern nations, and several banks were imperiled by these changes."

Sample of Sources Used:

• Auyeung, PK. "A comparative study of accounting adaptation: China and Japan during the nineteenth century." Accounting Historians Journal, 2002: n.p.
• Ben Naceur, S and Kandil, M. Basel Accord and Lending Behavior: Evidence from MENA Region. IMF Paper, Washington: IMF, 2007.
• Catarineu-Rabell, E, Jackson, P and Tsomocos, D. "Procyclicality and the New Basel Accord--Banks' Choice of Loan Rating System." LSE. February 14, 2002. http://cep.lse/ac/uk/seminarpapers/14-02-02-TSO.pdf (accessed February 15, 2008).
• Chan, MW Luke and Rotenberg, W. "Accounting, Accounting Education and Economic Reform in the People's Republic of China." International Studies of Management & Organization, 1999: 37.
• Crocket, A. "Beyond Basel II: What Comes Next?" GARP 2005. 2005. www.garp.com/events/garp2005postconf/presentations/andrewcrockett.ppt (accessed February 15, 2008).

More papers on Basel II Banking Supervision:

• Descriptive Essay # 105746 : "Banking Regulation Basel II"
• Research Paper # 47424 : "Basel Capital Accord II"
• Research Proposal # 149764 : "Basel II Accord on Shipping Finance"

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