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Bank supervisors have long recognized two types of shortcomingsin the Basle Accord’s risk-based capital (RBC …)framework. First, the regulatory measures of “capital” maynot represent a bank’s true capacity to absorb unexpectedlosses. Deficiencies …
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Liberalization and deregulation have recently accelerated.It is therefore useful to keep risk within a certain level inrelation to capital, considering that financial institutionsmust control their risk appropriately to maintain thesafety and soundness of their operation. In 1988, the...
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