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• Friday, 12 March 2010

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• Three Pillars of the Basel II Accord - 25 February 2010

The Basel II Accord, which addresses recommendations on banking sector regulations and laws, is split into three main categories, often referred to as the "three pillars" of the accord, being: Minimum Capital Requirements, Supervisory Committee, and Market Discipline. As the name suggests, the first pillar deals with the requirement of having sufficient capital to cover the three main risk components faced by banks, that of credit risk, market risk and operational risk, and while banks are exposed to additional risks in day-to-day business, these are addressed in the second pillar of the Basel II Accord. Credit risk is calculated by using the Standardized Approach utilizing external assessment procedures; the Foundation Internal Rating-Based Approach (IRB); or the Advanced IRB. Operational risk is measured in one of three ways, being the Basic Indicator Approach (BIA), Standardized Approach (TSA), or the Internal Measurement Approach – an adaptation of the Advanced Measurement Approach (AMA). The preferred method of assessing market risk is by means of Value at Risk (VaR).

• Final Week of February May Prove Challenging on Wall Street - 22 February 2010

While stocks on Wall Street have been advancing in the past two weeks, they remain just short of treading on positive ground for the first time in 2010, an event that stock market players are no doubt eager for. The week ahead on Wall Street looks set to present numerous challenges as reports from various sectors become available. Most analysts are in agreement that the US economy is on its way to recovery, but not at a pace that is readily discernable by the people most affected - unemployed and financially embattled American citizens.

• BCBS and the Basel II Accord - 18 February 2010

Created in 1974 by the G10 nations, and meeting four times each year, the Basel Committee on Banking Supervision (BCBS) consists of representatives from 27 countries who gather to formulate and analyze broad-based standards and guidelines for efficient and transparent banking supervision. The name of the committee is taken from the name of the city in Switzerland that hosts committee meetings. For the recommendations to carry any weight, each member country needs to implement these standards through its national system, and while adjustments may need to be made to suit local circumstances, the core values of these recommendations should remain as a solid foundation. This will ensures that the purpose of the committee in supporting the implementation of common approaches and standards for banking by member countries will be realized.

• Green Brands – Appealing to Consumer Social Responsibility - 16 February 2010

The consumer swing to "green brands" is closely related to ethical/green consumerism for the man in the street, as well as being linked to corporate triple bottom line reporting, and the growing trend of socially responsible investing for stock market players. It is widely agreed that this trend toward going green will gain momentum moving into the future, as the world-wide focus remains on the many and diverse issues relating to global warming.

• Global Reporting Initiative - 12 February 2010

With concepts such environmental sustainability, carbon footprints and social responsibility becoming part of everyday business vocabulary, the Global Reporting Initiative (GRI) is serving an increasingly important role as it strives to "create conditions for the transparent and reliable exchange of sustainability information through the development and continuous improvement of the GRI Sustainability Reporting Framework" – as stated in its Mission Statement. So what is the GRI?

• The Amsterdam Global Conference on Sustainability and Transparency - 8 February 2010

Taking place on 26-28 May 2010, the Amsterdam Global Conference on Sustainability and Transparency will has as its theme: "Rethink. Rebuild. Report." As a Global Reporting Initiative event, the conference will host a gathering of around 1,000 executive decision-makers from a range of firms, as well as governmental policymakers, non-government organizations and civil society. The majority, if not all, of these attendees are already actively participating in the Global Reporting Initiative (GRI) – a world-wide project setting standards for sustainability, or ecological/carbon footprint, reporting. One of the goals of the GRI is to see the establishment of sustainability reporting by all organizations as a routine requirement, in much the same way as financial reporting is required.

• US Triple A Rating in Jeopardy - 4 February 2010

Moody's Investors Service has expressed concern that the Triple A (Aaa) Sovereign credit rating currently enjoyed by the United States, may have to be downgraded, unless the country's economic growth performs better than expected in the near term, with a tougher stance being taken to tackle the budget deficit. The senior credit officer at Moody's noted that the budget outlook presented by the Obama administration this week revealed that the projected deficits failed to stabilize debt levels in relation to GDP. This announcement by Moody’s on Wednesday served to confirm that the growing concern of investors over the US deficit is not unfounded, and the country is facing a pattern of debt growth that shows no obvious sign of letting up.

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