A recent survey by ICBI on risk management has revealed that Basel II is the biggest concern for financial companies. The majority of U.S. banks are confident they can meet the deadline for compliance with Basel II, but are worried about some aspects of risk management.
The Ri$k Capital 2006 Survey by ICBI has shown that compliance with Basel II is the most serious risk for all U.S. financial organizations. The respondents described that particular regulatory act as their biggest worry over the next twelve months.
A large majority of companies (71%) are confident of complying with Basel II by the 2008 deadline, and show little concern about the delay in U.S. implementation. But despite that air of confidence, regulatory compliance (39%) still heads the list of the most dangerous risks. The vast majority (87%) of those polled also stated that the three areas of the Basel II Accord (operational, credit and market risks) were the greatest challenges businesses would face in the near future.
When asked what the driving force was for turning risk management from theory into practice, 65% responded by saying that the catalyst was aligning risk management practices with the firm’s strategic objectives.
Although over a third of the respondents believe that integration of credit and market risks is still just a theory, 41% said they had either managed to achieve it or were resolving the issues.
The most surprising result to come out of the study was in response to which regulation caused most concern after Basel II. Most respondents answered “Basel III”, which came ahead of the Sarbanes-Oxley Act of 2002 and a number of other regulations.
Source: Chase Cooper
