Emerging nations consider Basel II

Basel, Switzerland – Latin America will be the non-OECD continent with the highest percentage of banking assets under the various Basel II op risk approaches according to a new study completed by the Financial Stability Institute. Released at the end of July, Implementation of the new capital adequacy framework in non-Basel Committee member countries , also shows that the Caribbean will have the lowest implementation level, followed by Asia.

In fact, the Hong Kong Monetary Authority announced in sister publication AsiaRisk in July that it would not be permitting banks to use the advanced measurement approach at all. "It’s the only thing in Basel II we’re not going to allow initially because we don’t believe that building up elaborate systems for op risk is helping banks manage risk too much," says Simon Topping, executive director, banking policy. "We are expecting banks to focus their dollars on the management of op risk."

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