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臺大管理論叢
第
28
卷第
2
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Dimension/Criteria
Content
D. Learning and Growth
D1. Management Risk
Risk caused by failure to fully communicate expectations regarding
performance, to establish relevant operational indicators, and to achieve
agreement on performance management
D2. Leadership Risk
Risk related to negative influences caused by changes in policies,
criteria, and the execution of procedures
D3. Intellectual
Property Risk
Risk related to company penalty and punishment caused by intellectual
property violation
Note: revised according to Tseng et al. (2011)
2.2 The Basel Committee on Banking Supervision and Key Risk Factors
To enhance the stability of the financial system, in July 1988, the Basel Committee
on Banking Supervision (BCBS) released
International Convergence of Capital
Measurement and Capital Standards
(i.e., the accord), called Basel I, which laid the
foundation for capital adequacy, with risks as its benchmark. The BCBS recommended
that its members regulate financial organizations operating in their countries, and that they
conduct credit risk measurements before the end of 1992 to ensure that their preparation
for operational risks was adequate. The minimum capital standard was 8%. The total
amount of risk assets for market risk provisions was increased in 1996. The New Capital
Adequacy Framework, released in June 1996, was intended to replace Basel I, which was
released in July 1988. The Basel I regulations target both member and nonmember
countries.
Basel II is divided into three dimensions. The first dimension is the framework of the
accord (i.e., minimum capital requirements), which contains credit, market, and
operational risks. Regarding the calculation of various risk capital provisions, the primary
goals for overall capital provision are to reflect banks’ risk sensitivity, to prepare banks for
risks, and to maintain the current standards for capital control limits. The second
dimension requires supervisory organizations to guarantee the completeness of procedures
for evaluating the internal banking capital adequacy ratio. The third dimension involves
the importance of strengthening market disciplines. Information disclosure regulations are
used to fulfill the basic requirements of market disciplines (BCBS, 2001, 2006).
Since Taiwan’s financial industry implemented Basel II at the beginning of 2007,
capital-adequacy-related ratios have decreased substantially. At the end of March 2007,
the capital adequacy ratio as calculated according to Basel II was 10.14%, which is 0.73%