The Challenges And Suggestions Of Basel Ii Risk Management Framework Under Subprime Crisis

The occurrence of subprime crisis aroused the doubts on the efficiency of Basel II, leading to the reconsideration of its supervision framework. The paper elaborated on the challenges and inadequacies of Basel II risk management exposed during subprime crisis, and further concluded several feasible suggestions on the improvement of Basel II risk management after taking the actions of Basel Committee and latest revision of its framework into consideration. Furthermore, the paper also offers valuable suggestions on China's banking risk management under full understanding and analysis of Basel II, incorporating the latest progresses and challenges of the implementation of China New Capital Accord, such as the improvement and promotion of Internal Ratings-Based (IRB) approach of credit risk and market risk, the basic analysis of operational risk in China, the further implementation of the press test and the influence of Capital Adquency Rate (CAR) under New Captial Accord. The paper deepens the theme and research value of the paper by combining the global experiences and updates with China's characteristics.