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Glossary of Stock Market Terms

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Basel II

An update of Basel I, Basel II was published in June 2004. The revised accord aimed to improve the consistency of capital regulations internationally, make regulatory capital more risk sensitive, and promote enhanced risk-management practices among large, internationally active banking organizations. Generally speaking, with Basel II, the greater risk to which the bank is exposed, the greater the amount of capital the bank needs to hold. However, critics of Basel II say that the revised accord failed to regulate certain risk transfers, such as securitization or transfer of risk to unregulated parts of holding companies.

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