Basel II Accord 'was contributing factor in financial crisis'

www.moneynews.co.uk > General finance > Basel II Accord 'was contributing factor in financial crisis'

Basel II Accord 'was contributing factor in financial crisis'

Tue 6th Oct 2009

The Basel II Accord has been identified as one of up to ten factors that combined to create the financial crisis, according to an industry expert.

Dr Lawrence Galitz, director and founder of ACF Consultants, claimed that the scheme allowed banks to take more risks.

The programme was finalised in 2004 and altered the capital adequacy required in lending and the regulations which applied to them, according to the Bank for International Settlements.

Dr Galitz explained: "The new Basel II Accord required banks to have anything between a third and a half less capital than they had previously needed under the pre-existing Basel I scheme."

He stressed that there was no single cause which brought about the banking crisis, but that the accord was one of them and he did not expect it to be amended at least until the end of 2010.

This is because, in his opinion, it is time-consuming process to make sure that the right changes are made.

Click here for more general finance news

Related News : General finance
	Citizens Advice welfare applauds government
	Confused.com energy defends British Gas
	Bank of Ireland passes stress test
	Tesco Mobile deal 'courts consumers'
	Scottish Widows Investment Partnership notes favourable response
	Customers should fix now, says moneysupermarket.com energy
	Confused.com highlights importance of getting the best deal
	Prices on the rise, says moneysupermarket.com energy
	Bank of Scotland economic report 'suggests transitional phase'
	Clydesdale and Yorkshire Banks security advice issued