Reaping rewards

Asian banks voluntarily embracing Basel II capital accord requirements believe their improved credit risk management policies are already giving them a competitive advantage. Alice Hales reports

The Basel II regulatory capital accord is often criticised on a regional basis because it does not appear to fully consider the make-up of Asian banks' balance sheets. These typically feature large credit-card pools, unrated exposures, high loan-to-value commercial property loans and small to medium-sized enterprise (SME) loans - all of which will see increased capital charges under the new accord.

That would appear to indicate that banks should only implement Basel II requirements once forced to