Resources for Basel II Capital Accord (Basel II)

05-06-2008: Basel II facing talent, data shortage

www.theedgedaily.com

A shortage of experienced talent in the area of operational risk management (ORM) and the lack of data are the key obstacles faced by Malaysian banks in the implementation of Basel II, according to a KPMG survey.

“Banks from the emerging countries report that they use predominantly internal loss data, the minimum standard required for adoption of Basel II. However, managers from Australian banks commented that internal data is the least useful for risk calculation as it is not the key driver in determining the amount of regulatory capital to be held,” said KPMG’s Basel II in the Asia-Pacific Banking Sector Survey.

Basel II is an accord on recommended banking laws and regulations issued by the Basel Committee on Banking Supervision in an effort to create an international standard that banking regulators can use when creating regulations on banks’ capital adequacy ratios to guard against financial and operational risks.

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