Resources for Basel II Capital Accord (Basel II)

Local banks eye impact of federal law on risk

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Local bankers are weighing the impact from the federal implementation of a new standard for how banks manage their risk.

The aim of the standard, called Basel II, is to better assess a bank's risk among all its financial dealings, including residential mortgage loans and items off the balance sheet.

"It is amazingly complicated," said Lyndon Wells, executive vice president at Intrust Bank, the area's largest locally based bank.

Experts and bankers said Basel II will have the greatest impact on the country's largest banks, such as Bank of America and Wachovia, because they deal with sophisticated financial instruments and transactions that will have to be assessed by regulators more closely.

"It's designed to make the larger banks more competitive internationally and get them in line with the way international banks have to compete," said Chuck Marshall, a manager in the financial institutions group at accounting and consulting firm Kennedy and Coe. Wells said compliance with the new standard will not be an issue for Intrust.

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