Learning from Basel's mistakes

Regulators are looking again at the Basel II Accord in an attempt to incorporate the lessons learned from the financial crisis. What have Solvency II rule-makers learned from the Basel experience? Joel Clark investigates

Basel II has been the subject of much criticism since the financial crisis took hold in 2007. The regulatory capital framework has been hauled back under the spotlight, under the premise it failed to ensure banks had adequate capital in place to prevent collapse or government bail-outs. The Basel Committee is revising the Accord to enforce better management of market, credit and liquidity risks by banks, with a greater focus on trading book risks, contingent liabilities and stress testing.

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