Emerging markets raise concerns at World Bank meeting

The discretion to introduce more flexibility in calculating certainoperational risks under the alternative standard approach (ASA) wascautiously welcomed by developing country representatives present at theWorld Bank/International Monetary Fund’s seminar on the Basel Accord at theannual meetings in Dubai. But many emerging markets continue to insist thatfurther refinements are needed and that other difficulties and a lack ofclarity remain in op risk and other areas.

The ASA, based on measures of business volume rather than gross income, isseen as an important step in eliminating the double charging effects thatoccur when higher margins are generated from higher risk lending, in turntriggering additional op risk charges. The newly proposed rules will allownational supervisors to substitute fixed margins, but is restricted tocommercial and retail business lines. Daniele Nouy, secretary-general of theBasel Committee on Banking Supervision, said that the