The purpose of this seminar is to give the participant a good introduction to the new Basel Accord – commonly known as "Basel II". We start with a look at the market trends such as "securitization" and the use of other off-balance financing and risk management techniques that have necessitated the development of a new framework. We then take a closer look at the "three pillars" upon which the new Basel Accord is based. First, we give an overview and examples of methods for quantifying market, credit and operational risk and we explain how these risks are related to a bank's "eligible capital" to arrive at the Capital Ratio. We present and explain the "standardized" as well as the more advanced approaches to measuring these risk. Further, we look at the "supervisory review process" in Pillar Two. We give an overview of the key principles of supervisory review, risk management guidance and supervisory transparency and accountability with respect to banking risks and explain how supervisors are expected to evaluate how well banks are assessing their capital needs relative to their risks. Third, we briefly discuss how "market discipline" is going to complement the minimum capital requirements and the supervisory review process. We explain how the increased disclosure requirements will allow market participants to assess the capital adequacy of the institution. Finally, we give an overview of important implementation issues and discuss the possible impact of Basel II on the bank's risk and capital management.