The New Basel Capital Accord is one of the largest challenges the international banking supervision faces with. It is a complex methodology for determining the capital adequacy that largely fits and arises from the current international financial markets conditions. The launching and the development of new banking products and instruments and new banking risks management methods imposed the need for serious changes in the existing Capital Accord of 1988 which sets forth the basic principles for determining the required amount of capital for covering the risks one bank is exposed to in its operations. As a result of such movements and changes, in 1999 the Basel Committee on Banking Supervision commenced the process of revision of the Capital Accord in order to develop a new framework for establishing the capital base.
