Proposals for changing the Basle Capital Accord overestimate the risks of lending to developing countries and may make banks less inclined to lend to these countries. IDS researchers are investigating the major areas of concern to developing countries about the soon to be completed Basle II Capital Accord. Implemented in its current form, the Accord is very likely to significantly reduce the quantity and increase the cost of bank lending to developing countries, whilst increasing cyclicality of such. The research explores ways to overcome these problems.