Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/23064
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dc.contributor.authorKirstein, Rolanden_US
dc.date.accessioned2009-01-29T15:36:09Z-
dc.date.available2009-01-29T15:36:09Z-
dc.date.issued2000en_US
dc.identifier.urihttp://hdl.handle.net/10419/23064-
dc.description.abstractThe Basle Accord of 1988 regulates how much equity banks must set aside as a cushion against the default risk. In its 1999 proposal for a new Accord, the Basle Committee seeks to introduce different equity ratios for customers of different risk levels. The proposal strongly favors external ratings as a means of risk determination. German banks, on the other hand, demand acknowledgement of their internal ratings. This paper shows that, even if assumed that banks have better diagnosis skill than external rating agencies, external ratings are better able to implement the goals of the Basle Committee than internal ratings. This is due to a lack of incentives to truthfully reveal their diagnosis results. These incentives may be provided by supervision of internal ratings, even if imperfect and only occasional. However, this requires that a fine be imposed if the supervising authority comes to a result different from the internal rating assigned by the bank.en_US
dc.language.isoengen_US
dc.relation.ispartofseries|aCSLE Discussion Paper |x2000-06en_US
dc.subject.jelD81en_US
dc.subject.jelK00en_US
dc.subject.jelG21en_US
dc.subject.ddc330en_US
dc.subject.keyworddiagnosis theoryen_US
dc.subject.keywordimperfect decision makingen_US
dc.subject.keywordcredit worthiness testsen_US
dc.subject.stwEigenkapitalvorschriftenen_US
dc.subject.stwKreditwürdigkeiten_US
dc.subject.stwÖkonomischer Anreizen_US
dc.subject.stwKreditgeschäften_US
dc.subject.stwTheorieen_US
dc.subject.stwDeutschlanden_US
dc.titleThe New Basle Accord, Internal Ratings, and the Incentives of Banksen_US
dc.typeWorking Paperen_US
dc.identifier.ppn503172359en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
dc.identifier.repecRePEc:zbw:csledp:200006-

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