And from a financial stability perspective it is in everyone's interest to have regulatory capital measures at large, complex banks more accurately reflect their actual risks. One of the major improvements in Basel II is the closer linking of capital requirements and risk.
The current Basel I measures are not very risk-sensitive and do not provide bankers, supervisors, or the marketplace with meaningful measures of risk at large, complex organizations. Under Basel I, it is possible for two banks, with dramatically different risk profiles in their commercial loan portfolios, to have the same regulatory capital requirement.