We need a Basel Accord that emphasises economic not regulatory capital, says Gilbert
Even before the new Basel Accord, Basel II, is implemented, some risk managers already see a need for a Basel III process to rectify flaws in Basel II.
Adam Gilbert, the managing director of the Global Credit Risk Management Group at JP Morgan Chase based in New York, believes the Basel Committee is making a mistake to treat regulatory capital with more importance than economic capital.
He said at the Capital Allocation USA Conference in New York that the major reason for a revised Basel Accord is the need for regulators and the industry to shift emphasis from regulatory capital to economic capital as a basis for business decision-making.
“Econ
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