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The Business Case For Basel II
The proposed Basel II accord, which international banking regulators expect to complete this year, would require banks to improve the way they match their capital reserves with the risks they take. Some European banks have already begun to comply with the draft standards, but banks in emerging markets are lagging behind, while US banks are sitting on the fence. Even so, they have sound business reasons for moving to adopt the new limits before the 2006 deadline.
The take-away:By acting now, US banks can improve their risk-management systems and update their operational processes to save tens of millions of dollars annually, particularly in underwriting expenses.
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