BASEL II IMPLEMENTATION BRIEF IN INDONESIA
11.06
Hendra Setyawan
,
BASEL II IMPLEMENTATION BRIEF
IN INDONESIA
:: Increased
Standardization Calculation of Capital AdequacyBank is a company that runs the intermediation of funds received from a client. If a bank fails, the impact will result in widespread influence clients and institutions who save their money or invest their money in the bank, and would create a bandwagon effect on the domestic and international markets.
Because of the importance of the role of banks in the performance of the functions it needs to be well and properly. Primary objective is to maintain customer confidence in the banking system. One of the rules that need to be made to regulate the banking system is the regulation of bank capital that serves as a buffer against potential losses.
Given
the importance of capital in the bank, in 1988 the BIS issued a draft capital
framework known as the 1988 accord (Basel I). The
system was created as an application framework for the measurement of credit
risk by requiring minimum standards of capital is 8%. Basel I Basel Committee designed as a
simple standard, requiring banks to separate exposures into a broader,
illustrating similarities debtor. Exposures
to costomers the same type ( such as exposure to all corporate customers) will
have the same capital requirements, ragardless of the potential differences in
the ability of credit and paymet risks possessed by each individual nasabah. With
the development of product that exist the world banking, the BIS again refine
the existing capital frame work in the 1988 accord with the conccept of issuing
new capital is more known by basel II. Basel II is based on the basic structure
of the 1988 accord that provides a framework for the calculation of capital
that are more sensitive to risk (risk-sensitive) and provides incentives to
improve the quality of risk management at the bank. This is achieved by adjusting capital
requirements with the risk of credit losses and also by introducing changes in
the calculation of capital caused by the exposure risk of losses due to
operational failures.
http://www.bi.go.id/web/id/Perbankan/Implementasi+Basel+II/
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