Market Risk Amendment

Basel I is often criticized because of lack of sensitivity to risk, and sensitivity to risk is the basic idea at the time of the Committee of Basel I.
Sensitivity level of risk increased when the Basel Committee issued a 'the amendment to the Capital Accord to incorporate Market Risks' in January 1996 (known as the "Market Risk amendment")
Market Risk Amendment is the peak of the process when the Committee published a paper entitled 'The Supervisory Treatment of Market Risks' and ask the bank and the market to provide commentary. Then in 1994 Committee to do research on the use of internal models by banks to calculate the market risk.
Internal model of the views of each bank to the risk that you run with a different approach from the RWA Basel I.
Basel Committee and the Market Risk amendment with the 'twin-track approach'. This approach of assessing the accuracy of the pengaplikasian quantitative internal model and the quality of the implementation process.