
Risk management and stability better under Basel II, but industry unprepared
Daily news headlines
Basel II will improve risk management and stabilise the banking system, but almost half the industry is not sure they will be ready in time.
A survey carried out by the Professional Risk Managers’ International Association (PRMIA), an educational institution, found that while more than 90% of bankers thought Basel would promote better risk management, and almost 80% of respondents believed the banking industry would become more stable, only 56% of bankers said they would definitely be ready in time for implementation. Just 14% of regulators thought all the banks they supervise were prepared for the framework’s introduction. But 55% believed the larger banks would be able to deal with the rules.
More than half of bankers thought their capital requirements would fall. 36% expected requirements to fall by more than 10%. The majority (62%) were sceptical about whether regulators could deal with the advanced models. Most were concerned about distortions, such as differential treatment across the banking and trading books, that Basel II will create.
PRMIA’s poll also found that 72% of bankers, 69% of regulators and 81% of consultants believed that Basel III is needed.
More than 1,000 people, the majority of whom were bankers, responded to the survey. Almost 60% of bankers were from larger institutions. Respondents came from 89 countries. The US was the best represented, with 14.5% of respondents from here. More than 10% resided in the UK, and more than 40% came from the G10.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Risk management
Strategies for effective real-time data capture and robust risk management
Risk management systems, processes and real-time data aggregation techniques are rapidly evolving across financial institutions against a backdrop of high market volatility and rapid technological development
Repo clearing could spur CDM adoption – Barclays
UK bank’s tech group believes repo market is primed for new data standards
Video Q&A with Andrew Aziz, chief strategy officer and head of product, SS&C Algorithmics
In this video, Andrew Aziz, chief strategy officer and head of product at SS&C Algorithmics, discusses the key learnings to emerge from the past 12 months, the gaps that exist in banks’ ALM frameworks and the steps required to ensure a more robust…
Climate risk overlays unnerve model-validation teams
Risk Live: Model risk managers fear they lack the data or skills to properly test expert judgement
Clearing members combing rule books after LME lawsuit win
Industry debates whether other CCPs and exchanges would cancel trades if faced with similar crisis
Interest rate and liquidity risk special report 2023
This special report explores the ongoing impact of higher interest rates on bank capital and liquidity, and the steps they are taking to shore up their liquidity risk management practices in the current environment.
How higher interest rates are affecting bank liquidity
A panel of industry experts discusses the challenges posed to banks’ capital and liquidity by a persistently higher interest rate environment. They also share insights on adapting their liquidity risk management strategies, tools and technologies for a…
Hard concentration: clearing members want clarity from CCPs
FCMs complain they struggle to pass opaque margin calculations through to end-clients