Building pillar 2

Risk managers are increasingly turning their attention from pillar 1 to pillar 2 compliance under Basel II. Regulatory guidelines are only giving so much assistance, leaving individual banks to draft their own standards. Kathleen Kearney reports


Many leading Asia-Pacific banks have completed the foundation internal ratings-based (IRB) approach to regulatory credit risk management under pillar 1 of the Basel II capital accord and are working on the assessment programme for pillar 2 compliance. While the Basel Committee on Banking Supervision has provided a framework for this programme at an international level, there is little guidance as yet coming from regulators in Asia. Hence, banks in the region are flying blind in some key areas -

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