Resources for Basel II Capital Accord (Basel II)

CBSL touts implementation of Basel II

www.sundaytimes.lk

Over the course of the past few years, the Central Bank of Sri Lanka (CBSL) has been moving forward on getting banks in Sri Lanka to implement the Basel II, the second of the Basel Accords which are recommendations on banking laws and regulations which were published in 2004.

Basel II sets forth international standards which can be used by banking regulators in creating regulations on the capital banks need to put aside as safeguards against financial and operations risks they face. Banks in Sri Lanka are required to implement Basel II recommendations by this year.

At a recent seminar on risk and compliance challenges in Sri Lanka organized by Keells Business Systems Ltd (KBSL), Oracle and i-flex solutions, Deputy Governor of the CBSL, Dr. Ranee Jayamaha said 2008 has been a continuation of global challenges.
These include the impact of the sub prime turmoil in the United States has affected Europe and other parts of the world, the Northern Rock crisis in the United Kingdom and large fraud in global markets, in particular Societe Generale, the French bank which recently disclosed a fraud of 4.5 billion euros. All these events served in exposing the vulnerability of the regulatory framework.

Jayamaha said the credibility of the bank suffered another blow this week when a report was released, stating that certain mechanisms of internal control of Societe Generale did not function and that functions were not always followed.

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