Dear  Emmanuel Abolo 

Greetings,

Yes , very interesting question , I think it is related for many reasons internally , so the internal conditions of banking system also affect  and the external factors such as political and economic conditions also very important and affect . Finally , the feedback and control of polices also very important to show the results of implementations of credit policy in the banks   .So , I think many factors intersections with others .

Best Regards,

Dear Emmanuel!

In 2009 there were heavy interventions against controlling the financial sector from the US, UK and Germany. These interventions were successful and lead to the politics of cheap money.

So as an effect these countries and their banks can get money for zero interest wherelse developing countries don't get any credit or have to pay 10 or even 20 per cent interest rates.

In microcredit the average interest rate is 27 per cent.

So the business model of Basel is to allow a few governments and banks to print money with zero interest rate and let it "work" with 3,5,9 27 per cent.

The Basel Accords are made to hide this model by allegedly "conditions" that only disadvantage poorer countres and banks.

Why that?

Because the leading players only can create the equity needed by buying governmental bonds which are excepted from the Basel Accord equity rules.

You don't need any equity to buy them - if you are a bank. After signing the bond is counted for your equity - crazy isn't it?

So a few countries and banks print their money and the rest fights with bankrupt.

And the taxpayers have to pay the interests.

That's the "Basel Accords"!

P.S. Have a look at my "Basel Criteria" that was made to change this.

http://commons.ch/english/wp-content/uploads/The_Banker_Basel_Criteria_January_2014.pdf

I think Basel hasn't helped because Basel I actually came in part from U.S. regulators being asked by the International Lending and Supervision Act of 1983 after the 1982 Latin American debt crisis to raise capital requirements, but multi-laterally, not just for U.S. banks. Ethan Kapstein has written about how that came about http://www.princeton.edu/~ies/IES_Essays/E185.pdf. He points out the multi-lateral approach required forming a consensus, first with the British, and then the Japanese officials, and finally Europe signed off. The two problems with Basel capital requirements are both the numerator and the denominator. I think capital should be thought of as a source of funding, so the numerator should just include equity and long-term bonds, and preferably measured at market value rather than book value. The second problem is the risk-weights used in the denominator. They give banks incentives to hold assets that may or may not be safer, by lowering the actual capital required to back those assets. You can see some U.S. banks tilt their portfolios toward low capital charge assets (not all banks did this though). Third, the capital requirements are probably still too low. Gornall and Strebulaev in a Stanford working paper have shown that if you doubled capital requirements, you'd reduce bank failures by about 90%. Also, I think capital requirements should back deposits (or perhaps "run prone" sources of funding, generally, including deposits) rather than assets. This way capital requirements serve not as a buffer for losses in asset values, but to give depositors extra protection from the effects of bank default.

Hi Emmanuel,

This is my personal view. The Basel accord is reactionary in nature and tends to require banks to keep higher capital ratio when things are going wrong which can increase the risk of further financial failure.  In addition, the difficulty in predicting these crisis in itself means that getting an adequate measure in place to prevent it is a fallacy: How can you stop something you can't predict. Moreover, as rules get tightened, you see banks developing more complex instruments and products that the accord does not fully capture or unable to determine its risk.

I see Basel accord as one of many measures that is needed to curb the excesses of financial crisis and will advocate for more corporate governance and regulatory measures at the country level, especially, as an approach to preventing future crisis.

Dear Mr. Abolo, the link below leads you to an article by a lawyer in the Brazilian Central Bank with the answer to your question. Best regards, Leo

http://www.bcb.gov.br/pec/wps/ingl/wps335.pdf