However, it is important that given the questions that have been raised about certain aspects of Basel II in the contest of the sub-prime crisis and the moral hazard of self assessment, that the architects of Basel II revisit some of the major tenets of the new proposed regulatory framework, especially the advanced approach.
The role of ratings In a Basel II-regulated world, and in a world where market discipline matters greatly, ratings will become even more important. Ratings should reflect risk and prompt more responsible behaviour by financial institutions who value their ratings.