BASEL Essay Example | Topics and Well Written Essays - 750 words

BASEL - Essay Example The Accord outlines a set of standards for establishing minimum capital requirements for banking organizations. It encouraged banks to classify their experiences into broad categories reflecting similar types of borrowers. As an example, all exposures to corporate borrowers are subject to all capital requirements. However, with the advances in risk management practices, technology and banking markets, the 1998 Accord’s approach to measuring capital requirements has become less meaningful. This is why the BASEL have been updated into BASEL II, a consultative document that is believed to provide improved sensitivity to the risks that banks actually face and accommodate improvements in internal processes, more advanced risk measurement techniques and increasing use of sophisticated risk management practices. (Saidenberg, M. and Schuermann, 2005) More accommodating as it appears, the New Accord still has factors which have been pointed out by organizations such as the JCIF (2006) and the BIS (2001) itself that must be considered for determining requirements for market risks and capital standards. The most prominent issue is the improvements of the credit rating process. According to BASEL II, banks are encouraged to implement the internal ratings approach to determine credit capital requirements by using probability of default for borrower rating and loss given default for facility rating. This becomes problematic considering that banks have historically attributed ratings to transactions without separating the two risk factors. Compounding the problem is that banks have tended to rate customers using one or two ratings alone but the Accord specifies that borrowers should be evenly distributed across a minimum number of grades. Banks will find it necessary to re-engineer their internal credit rating system. The Internal Ratings Based approach specifies that credit risk measurement involves

What extent does neo-realism provide a satisfactory account of world Essay

What extent does neo-realism provide a satisfactory account of world politics - Essay Example Research shows that realism theory had the belief that the political order and the manner in which countries conduct themselves concerning international ground are projected by the nature of human beings (Dickinson 2006, p.63). Its foremost supposition originates from a human aspect; for instance, ambitions and aspirations are the main driving forces of international or world politics (Craig 2009, p. 45). On the contrary, neorealism declared that the current global system is a revolutionary setting with no dominant power directing and amending relationships among countries. It is not a social nature but rather a universal nature of the entire world that explains world politics. To a small extent, neo-realism provides satisfactory account to world politics. Every nation is in a search of individual benefit and its activities on a worldwide ground rely on its personal welfares. Therefore, in order to accomplish its individual benefits nations can establish coalitions, although even wit hin such coalitions every nation is only interested in attaining its own goals. Revolution of the global system is a command in itself. Accordingly, every nation continues to be in competition with other nations because of concern with its security and development (Craig 2009, p.50). Supremacy is dominant in understanding the affairs among nations. Therefore, search for authority makes countries to develop their resource, boost up economies, as well as develop skill and society as well. According to neorealism theory, the tougher the nation, the less susceptible it is on the global ground. Martial and fiscal greatness are the main measures for safety and growth, and thus accomplishment of these measures is performed through all ways possible. According to studies, conflict in neorealism is unavoidable. Nonetheless, in a nuclear period, conflicts among the nuclear nations are not likely to happen certainly, because such nations with nuclear weapons understand the effects of such conf lict. Thus, they use nuclear resources as a way of discouragement and balance of supremacy. In fact, neo-realism is a system of balance, and the anarchy of global setting, as well as an order instead of chaos (Van 2009, p. 80). This is because steadiness of supremacy is the only way to reservation harmony. Therefore, with such standards in place, neo-realism provides a satisfactory to the world politics. Neo-realism provides satisfactory account to world politics because it offers a well-organized explanation concerning the global political structure. It is a trial to explain international relations in technical terms through the mention of imbalanced capacities of nations. It also explains the revolutionary structure of the nation system, as well as the emphasis on great supremacies whose affairs regulate the most vital results of world politics (Krasner 2005, p.78). Neo-realism provides satisfactory account to world politics because it promotes peace and security among nations. Re searchers view the best international relation theory as one that emphasizes mainly on the structure of the system because structures regulate the actions the country. Foreign policy is led by the structure, and the nation officials are thus prisoners of the revolutionary system` structure and its determinist’s reasoning commands what they must carry out in the behavior of overseas rule (Jacques 2007, p. 106). Therefore, neo-realism offers a powerful explanation of the structure of the system of a nation much different from other theories because it takes the structure as the key tool of analysis. From studies, it clear that international rel