KPMG Study highlights regional differences in Basel implementation

According to a recently released global study by the consulting arm of KPMG, the the international auditing firm, there are significant differences in how financial institutions in the US and Europe are preparing for the coming Basel Accord revisions.

For example, the study shows that 60% of US respondents are planning to adopt the IRB Advanced approach for calculating capital requirements for credit risk, while only 32% plan to do so in Europe. Rather, 42% of European respondents plan to undertake the IRB Foundation approach instead, while only 13% of US firms plan to do so. The IRB Foundation approach will allow banks to estimate the probability of default associated with each borrower, while other inputs are to be supplied by the