Introduction

What a year banks have ahead of them. The new Basel capital Accord finally came into force from this month, while European financial institutions must implement the Markets in Financial Instruments Directive (Mifid) on November 1, 2007. It's a tough workload, by anyone's standards.

Basel II, in particular, has caused plenty of problems for banks. Risk managers say their compliance efforts haven't been helped by the late finalisation of many aspects of the rules, while many requirements remain vague and in need of further explanation. Most bankers remain broadly supportive of the aims of the Accord - to establish a more risk-sensitive framework for regulatory capital. But in what is surely a damning indictment of Basel II, risk managers interviewed by Risk last month say