Pillars II and III stalled in global Basel II implementation

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BASEL - The Financial Stability Institute (FSI), part of the Bank for International Settlements (BIS), which hosts the Basel Committee, has issued the results of its 2008 survey into the international implementation of Basel II. It reveals many regulators have shown signs of deferring Pillar II and Pillar III progress in the short term. Some 49 jurisdictions are offering to implement the advanced measurement approach for operational risk.

The FSI expects 77 jurisdictions will be implementing Pillars II and III by 2015, but says regulators are putting off implementation in the current regulatory climate.

The most recent 2008 update was sent to 130 countries. Basel II was beginning its roll out across Europe and some Asian jurisdictions when the financial crisis began. The US delayed and is still in the initial stages of implementation.

The FSI says 105 countries have implemented, or plan to implement, the Basel II regulatory capital regime, and that the number of countries implementing the three credit risk approaches has risen since 2006. Some 56 are implementing the advanced internal ratings-based approach to credit risk.

The summary of responses may be downloaded here.

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