Basel II could be detrimental to the industry, says Labarge

The implementation of the new Basel Accord (Basel II) will be more difficult than earlier envisioned, and could be disruptive to the banking industry, according to Suzanne Labarge, former Royal Bank of Canada chief risk officer (CRO).

Addressing the Risk Management Association and Professional Risk Managers’ International Association annual conference on capital management in New York, Labarge cast doubt on the optimism that has been expressed about Basel II. She said the Accord has categorised risks into three silos of credit, market and operational risks, leaving other risks outside of the mainstream discussion.

“I am less enthusiastic about the actual implementation of Basel II due to a number of reasons. By sticking to