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Amid Crunch, New Bank Rules Near
Duncan Kerr
The run of write-downs that investment banks have been forced to make because of this year's credit crisis has, in some respects, proved timely.
On Jan. 1, regulators will adopt the Basel Capital Accord, or Basel II, a global system designed to guard banks against the depth and severity of such losses. Basel II aims to ensure that banks better manage their risks and align their capital reserves with their risk profiles.
Unlike Basel I, which has been in place for 20 years, the new system will expect banks to hold adequate capital against all risks, including liquidity and interest-rate ...