The new agreement includes three pillars: first, minimum capital requirements; The second is the supervision and inspection of the capital adequacy ratio by the regulatory authorities; Third, information disclosure. 1. Minimum capital requirements As can be seen from the name of the new Basel Capital Accord, the Basel Committee has inherited the regulatory thinking of the old Basel Accord with capital adequacy ratio as the core, and regards capital requirements as the most important pillar. Of course, the capital requirements of the new accord have undergone extremely significant changes, which are embodied in the following aspects. (1) Expansion of risk categories Under the current financial structure, although credit risk is still the main risk faced by banks, the influence and destructive power of market risk and operational risk are further increasing. Therefore, in the formula of minimum capital requirements for banks, the denominator of the new agreement is increased from the weighted capital that simply reflects credit risk to the market risk and operational risk. Credit risk is determined by standard method or internal rating method (based on internal rating method, there are basic law and advanced law, and the complexity of the three methods increases in turn). The new agreement allows banks to use it flexibly according to their own risk management level and business complexity. It is suggested that banks with relatively simple business and weak management use the standard methods proposed in the old agreement. This method determines the risk weight according to the external credit rating agencies' ratings of the counterparty's sovereign risk, corporate risk and other items. Short-term credit rating is suitable for long-term creditor's rights and short-term creditor's rights, while short-term credit rating can only be used for short-term creditor's rights; If an institution has multiple external credit ratings at the same time, choose the highest two. If the two highest levels are the same, the credit rating of that level will be taken as a reference; If not, refer to level 2. However, due to the insufficient information of external credit rating agencies and the influence of human factors, it is difficult to guarantee the objectivity, fairness and accuracy of their rating results. Therefore, the new accord requires banks, especially those with strong strength, to adopt an internal-based rating method. The internal rating method is complex, so it is necessary to comprehensively consider various factors that constitute risks, establish a risk weight function to calculate the risk weight of assets, and then calculate the minimum capital that must be met; Market risks, including interest rate risk, stock risk, foreign exchange risk, commodity risk and option price risk, are difficult to quantify. Therefore, the new agreement suggests that national regulatory authorities should raise the minimum capital on the basis of the treatment methods proposed in the supplementary provisions, and pay special attention to market risks; It is also difficult to quantify operational risks, and the first draft of the new agreement does not propose any measurement methods. After fully listening to the opinions of all parties, the revised version of the new accord gives three methods to measure operational risks: ① Basic indicator method, that is, determining the necessary capital to deal with operational risks through a single indicator (such as a fixed proportion of the total income of banks). (2) Standard method, that is, classify banking business according to enterprise assets, project financing, retail and other categories, calculate the operational risk index respectively, and then multiply it by a certain fixed ratio to obtain the required capital. ③ Internal measurement method has the highest technical requirements. When measuring the risk of each business, banks must calculate the operational risk index, the probability of causing loss events and the degree of loss after the events according to internal data, and then obtain the capital requirements according to the corresponding proportion determined by the Basel Committee. In view of the complexity of the measurement method and the rationality to be verified, the Basel Committee has noticed that many banks take 20% of the minimum capital as the treatment method of operating venture capital, and is prepared to take this ratio as a broad guiding preparation standard. (2) Improvement and innovation of measurement methods According to the complexity of banking business, the Basel Committee reformed some methods of measuring risk and capital in the new accord, especially innovation. The introduction of these measures has largely solved the problem of being too rigid and unfair left over from the old agreement, making the new agreement more instructive and operable. 1988 The old agreement puts forward a standard method to measure the risk weight of assets. The new agreement still regards it as an important content, but it has been greatly improved on the basis of the original method. First of all, the standard status of OECD member countries is relegated to a secondary position, and the risk weight is mainly measured according to the external credit rating. Even if the sovereign risk assessment of assets is to be carried out, banks are required to rely on their own risk assessment or according to the assessment results of some international rating agencies. This basically eliminates the national discrimination in risk weight, which is conducive to the return of credit standards in credit risk identification and to correcting the unfair treatment of non-OECD countries (mainly developing countries) in the international financing market; Secondly, the risk level is increased by 50% and 150% on the basis of the original risk weight, which improves the risk sensitivity of bank assets to a certain extent, thus reflecting the actual diversity of assets. In view of the problems existing in the standard method in terms of information adequacy, timeliness, scientific method and objective fairness of credit rating, the Basel Committee advocated qualified large banks to improve their risk assessment level, build a more detailed risk assessment system and creatively put forward a set of exquisite capital calculation methods based on internal credit rating in the revised draft of the New Accord. The American Institute of International Finance, which provides decision support for the Basel Committee, even thinks that it is a core content of the New Basel Accord to promote banks to establish a sound internal risk rating system through this calculation method. The capital measurement method based on internal credit rating is divided into two steps. The first is to calculate the risk weight of each debt, and the formula is: where: refers to the risk weight of assets; It is the possible loss of debt after default; Is the debtor's default probability, defined by the Basel Committee as the average default rate of debt for one year; Is the maturity time of the creditor's rights; Yes, the adjustment function depends on; Then use another formula to determine, that is, the second is to determine the minimum capital scale corresponding to each debt. The formula is: where EAD is the risk exposure at the time of default, and for on-balance-sheet business, the Basel Committee defines it as the nominal outstanding amount on the balance sheet; The exposure at default of off-balance-sheet business can be measured by comparing on-balance-sheet items or determined by banks according to the internal rating system. Obviously, the key to the success of the capital measurement method based on internal rating is four input parameters, such as LGD, PD, EAD and M. The Basel Committee believes that banks can first determine LGD, EAD and M by regulators, and then when conditions are ripe, all of them can be determined by banks on the basis of comprehensive analysis of internal data. To launch the method based on internal rating, the Basel Committee should not only find a set of scientific and reasonable methods for asset risk weight and minimum capital requirements, but also lay a foundation for the extraction of bad debt reserves and provide an important basis for customers' comprehensive credit granting and pricing of financial instruments. (3) The expansion of the scope of capital constraint is aimed at the criticism of the old agreement from all walks of life, and the new agreement puts forward corresponding capital constraint countermeasures for changes in organizational forms and trading tools. If a single investment in non-bank institutions exceeds 15% of the Bank's capital scale, or the total scale of such investments exceeds the Bank's capital, the same amount shall be deducted from the Bank's capital; For financial holding companies whose main business is commercial banks and securitized assets, the capital requirements have been re-formulated, requiring banks to increase the minimum capital of various types and forms of assets; In addition, the merger of different institutions under the holding company has been fully considered, and cooperation with insurance regulators has been promoted. It is planned to formulate new corresponding rules and form a joint supervision framework for the financial industry to adapt to the general trend of all-round development of banks. 2. Supervision and inspection by regulatory authorities From the New Basel Accord, it can be seen that the Basel Committee has strengthened the responsibilities of financial regulatory authorities in various countries and put forward more detailed supporting measures. This reflects that the Basel Committee still does not despise banks as stakeholders, making use of information asymmetry to make adverse choices that violate regulatory rules, thus resulting in moral hazard. It is particularly important for regulators to formulate specific goals, codes of conduct and measures. The Basel Committee hopes that the regulatory authorities will bear three major responsibilities: First, comprehensively supervise the capital adequacy ratio of banks. The bank can proceed in three steps. First, judging whether a bank meets the requirements of adequacy ratio mainly depends on the nature of the market in which the bank is located, the reliability and effectiveness of the income, the risk management level of the bank and the previous risk resolution records; Secondly, according to the bank's risk status and changes in the external operating environment, the capital requirements higher than the minimum amount are put forward; Finally, when the capital scale is lower than the minimum requirement, necessary intervention should be made appropriately. The second is to cultivate the internal credit evaluation system of banks. As mentioned above, the Basel Committee encourages banks to use risk measurement methods based on internal credit ratings, which are divided into two levels: low level and high level. For every bank, there is a transitional stage from basic law to advanced law. It is the responsibility of regulators to cultivate the internal credit evaluation system at this stage to give the first three of the four main input parameters LGD, EAD, PD and M, and to facilitate the early end of this stage. On this basis, it is necessary to check the bank's internal evaluation procedures and capital strategies in time to make the bank's capital level and risk level reasonably match. The third is to speed up the process of institutionalization. The revised draft of 200 1 New Basel Accord specifically requires that commercial banks should not only act in accordance with the provisions of the New Basel Accord, but also submit a complete asset classification system and internal risk assessment system to the regulatory authorities, so that the new methods adapted to the new situation can be effectively guaranteed by the system. In the way of supervision, the new agreement still emphasizes the idea of combining on-site inspection with off-site inspection. 3. When the old agreement on market restraint was introduced, economists pointed out that the asymmetry of information should be an important reason why banks may harm social interests and thus need supervision, but the Basel Committee adopted the view that bank information should not be made public. These views are as follows: Banking business is obviously different from other industries, whether it is to absorb deposits or issue loans, it involves customers' business secrets; It is precisely because banks are a special industry with high debt management that information disclosure will affect the security and stability of banks and even the whole banking industry; In addition, the price of banks and the risk of assets are in a state of fluctuation, so information disclosure is of little significance. The new agreement clearly abandons these views. It looks at and treats banks from the perspective of public companies, emphasizing the constraints of market forces on banks. It believes that the market is a powerful external force to promote the rational and effective allocation of resources and comprehensively control operational risks of banks, which cannot be exerted by internal improvement of operations and external supervision. As a public company, only by establishing a modern corporate governance structure, rationalizing the principal-agent relationship and establishing internal checks and balances and restraint mechanisms like other public companies can banks truly establish a benign matching relationship between risk assets and capital, so as to win the market while accepting market constraints. Banks with sufficient capital, good risk control ability and control record can obtain resources from the market at more favorable prices and conditions, while banks with higher risks often have to pay a higher risk premium, provide additional guarantees or take other security measures. The new agreement is revised to promote information disclosure to ensure the binding role of the market on banks. The Basel Committee put forward the concept of comprehensive information disclosure for the first time, arguing that not only the information of risk and capital adequacy should be disclosed, but also the information of risk assessment and management process, capital structure and the matching of risk and capital should be disclosed. Not only qualitative information but also quantitative information should be disclosed; Not only core information but also additional information should be disclosed. Secondly, information disclosure itself also requires regulators to strengthen supervision and evaluate the information disclosure system of banks.