Possible weaknesses of the solvency ratios of the Basel Accords
Author(s) : J. VICENTE FRUET-CARDOZO, JOSE RAMON MILLAN DE LA LASTRA, JUAN ANTONIO CANAS MADUENO
Abstract
A strong, sturdy and stable banking system is a basic condition for how the engine of the economy of a country works, and thus to support sustainable economic growth. In theory, the Basel Accords I, II and III aim to achieve these characteristics of strength, endurance and stability for the financial system. However, in the light of the financial crisis of the past 20 years, there are doubts about the effectiveness that the Basel agreements had to support banks during financial storms over the years of its implementation.
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