It is not that far away to the date of Basel II implementation. Most banks would be on their final hurdle, well, at least for Pillar 1.

Up until now, firms who were planned to be beyond standardized, have spent millions. With lot of projects start winding up. One question has floated to the surface, which somehow, did not have a clear answer back then.

The question is, with all this cost and fuzz, along with the regulator caps the capital savings at least in the starting few years, is this all worth it in the end? The compelling discussion is around, was this a compliance or strategic project? Now, obviously the starting was compliance, if the regulator insisted banks to achieve AIRB. Then, it was also strategic, so you are not the only firm who got left behind.

If firm was leaning more to the compliance side, they would not have realised the full benefit of Basel, apart from regulatory capital savings, better pricing and better CRM. However, there would probably be no tactical planning or resources for on-going business as usual activities. Furthermore, the AIRB models themselves would most likely not as sophiscated as if other firms took on Basel as a strategic move.

Hence, just a little survey, so we could understand how Basel is being treated from region to region.

Question: From your point of view, does your firm try to achieve Basel as compliance, or, strategic? If it is compliance, how you think the firm would have done differently if going for strategic (

vice versa)?