Given the present prudential standard, the advantages of these alternative concepts consist, for example, in a reduction of the regulatory burden and banks having even greater freedom in their risk management by virtue of a pronounced market orientation.
At the same time - in addition to the reservations already mentioned - I perceive the danger of a decline in the overall security level of the individual credit institution and the banking system. Existing risks might be covered by less capital than hitherto under the Capital Accord. Self-regulation aiming at greater market discipline would be welcome.