The New Basel Capital Framework and its implementation in the European Union

Frank Dierick, Fatima Pires, Martin Scheicher and Kai Gereon Spitzer

No 42, Occasional Paper Series from European Central Bank

Abstract: Following the adoption by the Basel Committee of new capital rules for banks, aprocess is now taking place in the EU to transpose the rules into Community law and, ultimately, into national legislation. This paper gives an overview of the main issues that relate to the EU implementation, mainly from theperspectives of financial stability and financial integration. Although the EU rules are to a large extent based on the texts of the Basel Committee, modifications have been introduced to account for the specific legal and institutional setting, as well as for some features of the European financial system. The paper gives an overview of these modifications and deals in greater detail with a number of selected topics: the monitoring of procyclicality, the role of the consolidating supervisor and the treatment of real estate lending and covered bonds. The paper concludes with an outlook for the future. JEL Classification: G21, G28

Keywords: banks; Basel II; capital requirements; financial regulation; Financial Stability; financial supervision; risk management (search for similar items in EconPapers)
Date: 2005-12
Note: 503954
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Citations: View citations in EconPapers (34)

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