Credit risk analysis rating on the basis of Basel II Accord

Basel II – the new Basel capital requirements agreement (source: Deutsche Bundesbank) … "The new regulation stipulates a series of simple and advanced approaches to measuring the credit risk and operational risk when determining the capital requirements ratio. It lays down a flexible framework within which a bank, subject to supervisory approval, may apply an approach that best suits its complexity and risk profile. Furthermore, the new regulation specifically rewards banks for stricter and more precise measurement of risk. … A capital base that is appropriate to the risk – as important as this is – cannot ensure a bank's solvency nor the stability of the banking system on its own. Ultimately, the decisive factor is the risk and revenue profile determined by the management for a bank, combined with management's ability to control risks taken and to bear those risks in the long term."