The article discusses the new Basel II Capital Accord, which aims to improve the safety and soundness of the global financial system by aligning regulatory capital with underlying risks. It addresses issues with the previous Basel I Accord and introduces a new framework for determining capital requirements based on credit, operational, and market risks. The implementation of Basel II has started in EU countries and will soon take effect in the U.S. The goal is to enhance risk measurement, internal control, and market discipline in the banking industry.