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Title:The new Basle capital accord and developing countries: Issues, implications and policy proposals PDF Logo
Authors:Griffith-Jones, Stephany
Spratt, Stephen
Issue Date:2002
Series/Report no.:WIDER Discussion Papers // World Institute for Development Economics (UNU-WIDER) 2002/36
Abstract:This paper argues that, if implemented in its current form, the new Basle Capital Accord will adversely effect developing sovereigns, corporates and banks wishing to borrow in international markets. This impact will result from the major banks’ lending patterns being altered by the adoption of internal ratings based approaches, leading to a significant reduction of bank, and/or a sharp increase in the cost of international borrowing for many developing countries. Greater use of banks’ internal risk management systems is also inherently pro-cyclical and therefore likely to amplify the economic cycle, thus increasing both the frequency and scale of crises.
Subjects:risk-management
internal-ratings
pro-cyclicality
net impact
JEL:F34
G18
G21
ISBN:9291901954
Document Type:Working Paper
Appears in Collections:WIDER Discussion Papers, United Nations University (UNU)

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