Governor of the Reserve Bank of India speaks of challenges and implications for Basel II in Asia

The governor of the Reserve Bank of India (RBI) Dr. Y.V. Reddy delivered a speech today discussing the dangers of Asian banks prematurely adopting Basel II regulation, saying that not all non-G10 supervisory authorities need it to strengthen supervision.

Reddy supported the views of the Executive Board of the International Monetary Fund (IMF), which indicates that premature adoption of Basel II in countries with limited capacity could inappropriately divert resources from the more urgent priorities, ultimately weakening rather than strengthening supervision. Countries should give priority first to strengthening their financial systems comprising institutions, markets and infrastructure and focus on achieving greater level of compliance with