Basel II and the single-instrument bank

Banks could take a cue from the construction industry if they want to lessen the burden of Basel II, argues Ron Dembo, in the first instalment of a new Risk column.

Banks around the world are struggling to prepare for Basel II. The new Accord affects almost every part of them, so it is a gigantic task for any organisation to get its hands around.

But that is precisely what banks are trying to do today – attempting to solve the whole problem at once. That is incredibly difficult to do, so what happens is different groups work on their particular aspects of the problem, and no-one can see the whole picture.

Meanwhile, they all hope that when the dust settles