BASEL II

Paper Summary:

This paper describes the Basel II project. The author traces the development of this coordination system for banks, showing how the current project builds on Basel I. The paper further describes the need for coordination among risk data at banks, and explains why implementation of Basel II can be a challenging process.

From the Paper:

"However banks are still not coordinating data properly. In other words, while they are rapidly adopting Basel II, they are still underestimating the importance of sharing data across various units. McKibben notes that" Although it is a best practice, coordination of data among risk segments and with other enterprise data initiatives has not been widely adopted by banks. A recent Gartner G2 survey of 97 US based banks of various sizes found that less than half coordinate operational-risk data activities with those for corporate performance management, only about one third coordinated risk activities with customer relationship management, and only 6% coordinate data initiatives with regulatory compliance."

Sample of Sources Used:

• The Economist Intelligence and MMC Enterprise Risk, "Enterprise Risk Management-Implementing new Solutions", 2001
• Gartner Inc. Douglas McKibben, "Predictions for 2005: Risk Management will boost Bank Performance", November 2004
• Financial Insights, Simona Macellari, "Basel II: It all Depends on where you want to get to," January 2005.
• The New Basel Capital Accord. BCBS: www.bis.org/publ/bcbsca.htm

More papers on BASEL II:

• Research Paper # 106554 : "Basel II Banking Supervision"
• Descriptive Essay # 105746 : "Banking Regulation Basel II"
• Research Proposal # 149764 : "Basel II Accord on Shipping Finance"

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