This is one survey that should make the consultants working in the Basel II space happy. The Financial Stability Institute (no, I hadn’t heard of them either – but they are part of the BIS) have released a paper giving the results of asking regulators around the world whether they will be implementing the Basel II accord.
Of the 98 that responded (of 115 countries asked), 95 said they would be implementing, with most to do so before 2015.
The responses varied widely, however, when asked which approaches they would be implementing. Many of the smaller jurisdictions do not plan to implement the advanced approaches at all (or at least by 2015) – which is understandable, given the sheer expense of regulating this approach. Paying for mathematicians qualified to check the work of the other mathematicians who actually built the models is expensive.
Of the 95 indicating they will adopt, 70 will be using the standardised credit risk, 55 FIRB and 45 AIRB by 2015. Presumably, 25 will be adopting after 2015 – unless some are using the US approach and only allowing advanced.
For operational risk, 65 will have basic indicator approach, 57 standardised and 42 advanced, again by 2015.
For pillar 2 and pillar 3, the numbers are broadly similar – as you would expect. 71 for pillar 2 and 66 for pillar 3. I just question those jurisdictions who plan to have only one or two of the pillars in place – I think it will make for a shaky building.
If you are interested in how it is going, give it a read.
Most popular