Basel at a crossroads

Francesco Cannata and Simone Casellina
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Francesco Cannata: Banca d’Italia
Simone Casellina: Banca d’Italia

BANCARIA, 2013, vol. 07, 35-38

Abstract: The credibility of prudential metrics as proxies for risk, i.e. the backbone of the Basel capital framework, is often called into question. From a regulatory side, ongoing works aim at strengthening the risk-sensitivity of capital requirements but, at the same time, banks’ autonomy is often limited by supervisory action (e.g. capital add-ons and floors).This might give rise to an inconsistent and even more complex framework. We argue in favour of an alternative solution that requires an higher awareness of regulators of the limits of risks measurement in banking, distinguishing the activities whose risks are measurable from those for which they are not, at this stage at least

JEL-codes: G21 G28 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:ban:bancar:v:7:y:2013:m:july:p:35-38

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