IntroductionBasel II was introduced in 2004 following the perceived weakness of the previous agreement called Basel I. It was believed that this new agreement would be more effective as it aimed to address three major risk categories: credit risk, market risk and operational risks. The Basel Committee believed that banks could protect themselves from the risks mentioned above by having an adequate level of capital. However, Basel's methodology for deriving the above risks was somewhat misleading. For example, credit risk was based on historical data. While historical data can sometimes serve as an indication of future events, reliable data was inadequate in this scenario. It could not help predict anomalous and rare events, such as the financial crisis, since it only stemmed from the last 5 years. Similarly, both the internal rating and the standardized credit rating approach were cited as less than credible methods. At the height of the global crisis, the weaknesses of both methods emerged. In particular, they were subject to “manipulation” in favor of banks and, as a result, Basel II failed to achieve its aim of ensuring banks had adequate minimum capital (Reinmart, 2009; Schemmam, 2008; Lennox & Becker, 2011). RiskBasel II has defined a capital adequacy framework through three pillars. The first pillar defined the capital requirements, developing capital ratio rules taking into account the risk categories mentioned above. Credit risk, was the initial concern of Basel I, is the risk associated with borrower default, a factor that could push the bank in question into a liquidity crisis or insolvency. It therefore focuses on the probability of default and the decision made in one country that could influence the cost of the safety net of other countries (Caprio, Kun & Kane, 2008). Cited Caprio, G., Kun, D. A., & Kane, J. E. (2008). The 2007 collapse in structured securitization: look for lessons, not scapegoats. World Bank Policy Research Working Paper, 4-51.Lennox, K., & Becker, N. (2011). Around a table we discuss the strengths and weaknesses of Basel II, then propose the way forward. Banking Review, 4, 5-15Reinmart, C.(2009). Causes and consequences of the crisis. “Leeway journal ofFinance, 12, 32-40. Schemmann, M. (2OO8). Why banks keep failing: money, banks and the Basel II accord. Central Asian Affairs, 1, 72-76. Wignall, B. A., & Atkinston*, P. (2010). Thinking beyond Basel III: solution needed for capital and liquidity. OECD Journal: Financial Market Trends, 2010, 1-23.