Le Pan advises on AMA frameworks
NEW YORK – Nicholas Le Pan, vice-chairman of the Basel Committee on Banking Supervision, offered "constructive criticism" to both banks and supervisors in his plenary address to the OpRiskUSA conference in New York in early April. Focusing on the challenges around allocating capital between home and host countries under the advanced measurement approach, he urged regulators to not let "the best become the enemy of the good" when reviewing AMA frameworks.
He also criticised banks that weren’t effectively communicating about Basel II within their organisation. "In many cases, local management of certain subsidiaries had virtually no knowledge of the Basel II implementation approach to be adopted by the parent bank," said Le Pan. "[If banks] want to implement Basel II efficiently and effectively, they must invest time in keeping local management and host supervisors adequately informed." He also slammed banks that came to regulators "with three
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