First, the new Capital Accord will incorporate market and operational risks, which are not taken into account in the current Capital Accord, in banking accounts. Second, it will measure credit risk more precisely and impose capital charges more appropriately. For the past few years, banks have increasingly faced more complex and sophisticated types of risks.
Until a better business model is developed that eliminates the business incentives that can potentially harm consumers, there will be a need for close regulatory scrutiny of these issues and for appropriate enforcement action that addresses them. Thank you. 6  BIS Review 150/2010