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Strengthening the Resilience of the Banking Sector
Apr 16, 2010
Comment on the Basel Committee on Banking Supervision’s Consultative Document entitled Strengthening the Resilience of the Banking Sector
RiskMetrics Group is delighted to have the opportunity to comment on the Basel Committee on Banking Supervision’s Consultative Document entitled Strengthening the Resilience of the Banking Sector, published in December 2009.
We applaud the Committee for reinforcing the concept that financial institutions posing higher risks to the system must hold more capital. Most importantly, during this challenging economic environment, addressing the issue of the quality and quantity of capital is crucial in mitigating risk and complexity in the banking system. We also welcome the Committee’s efforts to look at financial institutions on a common basis to guarantee a level playing field in the banking industry.
However, the introduction of this new comprehensive set of rules should be well balanced in order to avoid thwarting financial innovation, which we believe serves an important role in economic development and the ability for financial systems to efficiently manage risk.
In the next pages we will provide some general and specific remarks to the document at issue.
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