Virtually all of Asia has voiced its intention of adopting Basel II, with the stronger economies of Hong Kong, Singapore and Australia planning to do so shortly after 2008. A number of other countries, including the Philippines, say they will phase in the regulations over a five-year period. According to experts at InfoWatch, the Basel II regulations have become so popular that they will soon cover the whole planet.
The vast majority of Asian banks intend to comply with the provisions of Basel II, reports Reuters. Although the accord was initially created for the G10 countries, Asia’s banks are keen to comply to maintain their competitiveness.
Hong Kong, Singapore and Australia plan to adopt the more advanced methods for measuring risk immediately after Basel II comes into force in the U.S. and the European Union in 2008. But there are also a number of other countries that intend to adopt the accord’s regulations over the next five years.
However, some of the world’s larger banks are far from sure that Asia will find it easy to solve the problems of Basel II. The head of Deutsche Bank’s global markets for Asia said that banks in the Pacific Ocean region will find it particularly hard to comply fully with the provisions of Basel II, and that concerns not only the banks themselves but also regulatory bodies. Doubts have been raised on the applicability of Basel II for banks in emerging economies that do not have sophisticated risk management systems in place.
At the same time only one country in the region – China – has kept its plans regarding Basel II under wraps. But the more China integrates with the world economy, the more likely it is that the country will eventually have to adopt Basel II.
“Basel II is no longer just an international normative act but an accord of global proportions. However, the road to compliance that banks around the world now face is anything but straightforward because implementing a risk management system is no easy task. But I’m sure that with a collective effort those difficulties can be overcome,” says Denis Zenkin, marketing director at InfoWatch.
Source: Reuters
