What is Basel II, is it helpful?

Answer Posted / mehraj wani

Basel-II is the improvised form of Basel-I. In Basel-I only
two risks were taken into account that is, Market risk and
credit Risk. But in Basel II the another equally important
Risk that is Oprational Risk is also taken into account.

unlike Basel-I, Basel-II has categorised all the concerns
with respect to their respective ratings. The corporate
with High rating is to be assigned with low capital and the
corporate wipth low rating is to be assigned with high
capital charge. The Basel-I was lacking this thing and was
running on the concept that "One Size Fitts All" .
Ofcourse Basel-II is helpful as it an improvised version.

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