Answer to Question #227448 in Management for Peter Masih

Question

Credit appraisal is a critical analytical tool of bank. Largely the profitability of bank
hinges on this tool. Any weakness on this front is reflected on the profitability of banks
and it also results in accumulation of stressed assets. BASEL-II has given strong
recommendations to check this menace. Elaborate in details the important
recommendations of this committee. (10 Marks)

Answer 1

To protect against banks' financial and operational risks, international banking regulations that governed how much capital banks were obliged to maintain were amended.