Basel Agreements Banks

To what extent do the Basel Accords provide guidance on how bankers can properly manage credit risks? How effective are credit risk management practices under the auspices of the Basel Accords? These are the central questions that are devoted to this chapter. Due to the increase in average capital ratios, the number of individual banks limited by capital rules has fallen sharply. Chart 4 shows the share of the 100 largest CHBs, limited by de jure capital standards, and we define a company as limited if its accounting capital ratio exceeds the regulatory minimum of less than 1.5 percent. The proportion of limited CHBs has decreased since the beginning of the sampling period and declined sharply after the implementation of the Basel standards at the end of 1990.