I will first touch briefly upon the broader objectives of the framework, then offer some thoughts about complexity in Basel II, provide additional detail about the risk-measurement and risk-management aspects of Basel II, and close with a short discussion about current implementation issues.
Objectives of Basel II The release last June of the new international capital framework, often referred to as Basel II, was a major development. It is composed of the now-familiar three pillars: Pillar 1, minimum capital requirements; Pillar 2, self assessment and supervisory review; and Pillar 3, market discipline.