The forgotten pillars of Basel II
As well as doubling down on complexity, Basel III represents the triumph of Pillar I capital rules and the total neglect of Pillars II and III, David Rowe argues
My column in the December issue of Risk, entitled Basel Faulty, elicited more numerous and more extensive comments than anything I have written in many years (Risk December 2012, page 68). Every response I received was supportive of my critical stance but they offered a variety of specific viewpoints.1
One recurring theme was that a more complex Pillar I capital calculation is having two effects:
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