Legal spotlight
The implications of Basel II on UK financial institutions have been far-reaching. Benedict James and Lisa Murray of law firm Linklaters look at banking books in the loans market
Regime change
The new Basel II capital adequacy regime became mandatory in the UK on 1 January 2008. It broadly maintains the Basel I definition of capital, with a minimum basic requirement of 8% of capital to risk-weighted assets. However, the new credit risk rules are intended to result in the amount of regulatory capital held by a bank against a loan correlating more closely with the borrower's creditworthiness and likelihood of default. For the first time this relationship is dynamic, so the
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