Risk overhaul at US banks due to economic capital not Basel II, says Fed's D'Silva

Economic capital, not the impending introduction of Basel II, is driving risk management initiatives at US banks, according to the Federal Bank of Chicago's director for capital and market risk, Adrian D'Silva.

D'Silva, speaking in a personal capacity at the Algo Credit Conference in Madrid this morning, said top US bank executives were increasingly aware of the need to implement leading-edge economic capital systems, and were setting aside budgets to achieve these aims. In his view, banks are not pushing ahead with major risk management projects due to the pending Basel II capital Accord, due for implementation at internationally active banks by the end of 2006 - although this may well be delayed