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The Application of Basel II to Trading Activities and the Treatment of Double Default Effects

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The efforts of the Basel Committee on Banking Supervision (BCBS) to revise the standards governing the capital adequacy of internationally active banks achieved a critical milestone in the publication of an agreed text in June 2004. The International Convergence of Capital Measurement and Capital Standards: a Revised Framework2 describes a more comprehensive measure and minimum standard for capital adequacy that national supervisory authorities represented on the BCBS are now working to implement through domestic rule-making and adoption procedures.
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