What are the main functions of capital in banking? Critically analyse the main principles of the 1988 Basel Capital Accord and outline what failings the Basel II agreement was designed to remedy and what ‘new’ features are expected with Basel III.

What are the main functions of capital in banking? Critically analyse the main principles of the 1988 Basel Capital Accord and outline what failings the Basel II agreement was designed to remedy and what ‘new’ features are expected with Basel III.