Building pillar 2

Regulatory capital

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Many leading Asia-Pacific banks have completed the foundation internal ratings-based (IRB) approach to regulatory credit risk management under pillar 1 of the Basel II capital accord and are working on the assessment programme for pillar 2 compliance. While the Basel Committee on Banking Supervision has provided a framework for this programme at an international level, there is little guidance as yet coming from regulators in Asia. Hence, banks in the region are flying blind in some key area