Sponsor's article > Implementation pulls in the punters

The UK's Financial Services Authority (FSA) was planning an intimate get-together at London's Café Royal to discuss Basel implementation. But massive interest meant a change of venue to accommodate the 500 people who eventually came.

Everybody knows about Basel – and its profile has risen even higher over the summer as the debate has spilled over into the mainstream press (see www.sungard.com/products_and_services/stars/nl0903b2concerns.htm). But why had the FSA underestimated the interest?

“I think the magic word was ‘implementation’”, says Richard Dyson – a senior risk consultant at SunGard. “Obviously, Basel II has been on banks’ radars for a long time but there seems to have been a ‘wait-and-see’ approach – and this event was a chance for people to actually see what other banks had done and what approach the FSA was taking”.

And, it appears, that banks have not done very much. Industry web site BaselAlert.com reports that, at the event, Ian Tower, head of the risk review department of the FSA’s prudential standards division, said that UK banks were further behind in their preparations for Basel II than the FSA expected them to be.

The FSA also re-iterated the emphasis that will be placed on stress testing under Pillar II and that the bank will be responsible for determining and running the tests appropriate to its own, changing exposure profile. The ability for a bank’s calculation engines to easily meet these changing requirements will likely be a key part of any solution.

The FSA Forum showed that British banks – and building societies – take notice when Basel talk shifts to implementation. And it also showed that system implementation is still in early stages.SunGard Trading and Risk Systems