For those looking for an up-to-the minute summary of why Basel II is needed I would advise a look at this speech by Randall Krosner of the US Fed. Like most of the speeches by members of the Fed, he appears to understand the reasons for Basel II and why, in a global sense, it is important – unlike the lack of understanding displayed by other US regulators.
As a side note – it is interesting that the BIS PR department choose to publish the speeches of Fed employees and not those of the FDIC. Curious.
I would disagree with him on the need for Basel IA though – as I have said before, if a small credit union in Australia can implement Basel II Standardised I see no reason why a US S&L cannot.