Basel II (Basel 2)

Basel II or "Basel 2" is a more recent set of rules for the capital requirements of credit institutions, with the aim of increasing the stability of the international financial system. Risks in the lending business should be better recorded, so that the equity provision of the credit institutions should be more risk-sensitive. This means that the higher the risk of the borrower, the higher the equity ratio must be in lending. The creditworthiness of the company thus plays an essential role in the issuing of loans (previously a uniform rate of 8% was applied to the issuing of company loans). In the financial crisis that began in 2008, many of the balance sheet rules prescribed by Basel 2, which are based on current market values, have exacerbated the crisis, as they increased the banks' current losses.

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