Instead, three mini fiscal cliffs have been created that would impact risks to global financial stability in 2013. Reflecting the sentiment in global financial markets, the US Volatility Index, more popularly known as the VIX peaked in June 2012, following the downgrade of several Spanish banks and the request by the Spanish government for bailout funding to recapitalize the banking system.
Current efforts to replace this capital accord with a new version (called Basel II) take a decidedly more riskfocused approach to measuring risk. The proposed approach would build on techniques used by the largest banks worldwide and should produce results that are much more consistent than the existing standard with market perceptions of risk.