and grouped in five categories according to creditrisk, carrying risk weights of zero (for example homecountry sovereign debt), ten, twenty, fifty, and up toone hundred percent (this category has, as anexample, most corporate debt). Banks withinternational presence are required to hold capitalequal to 8 % of the risk-weighted assets.ii.Since 1988, this framework has been progressivelyintroduced in member countries of G-10, currentlycomprising 13 countries, namely, Belgium, Canada,France, Germany, Italy, Japan, Luxembourg,Netherlands, Spain, Sweden, Switzerland, UnitedKingdom and the United States of America.iii.Most other countries, currently numbering over 100,have also adopted, at least in name, the principlesprescribed under Basel I. The efficiency with whichthey are enforced varies, even within nations of theGroup of Ten.
What is Basel II ? Explain !a.Basel II is the second of the Basel Accords, which arerecommendations on banking laws and regulations issuedby the Basel Committee on Banking Supervision. Thepurpose of Basel II, which was initially published in June2004, is to create an international standard that bankingregulators can use when creating regulations about howmuch capital banks need to put aside to guard against thetypes of financial and operational risks banks face.Advocates of Basel II believe that such an international