Bracing for Basel

To meet the Basel II requirements, banks must radically overhaul the way they measure credit risk and, for the first time, they must bring operations into the same rigorous risk management framework. But compliance has its price: Major banks will spend up to $150 million and the global industry as a whole will pay upwards of $180 billion.

The carrot offered to banks by Basel II is that if they develop sophisticated internal risk-measurement processes and models and can demonstrate their