In July 2006, the Basel Committee on Banking Supervision published its revised „International Convergence of Capital Measurement and Capital Standards: A Revised Framework – Comprehensive Version“, commonly known as the Basel II framework. This accord has been the basis for the implementation of the new regulatory capital requirements in national legislations across the world. In Switzerland, Basel II was primarily implemented through the Capital Adequacy Ordinance as of 29 September 2006 and the corresponding SFBC Circulars published in 2006 (adopted by the FINMA in 2008).
The Basel II framework should not be seen as another „tick box burden“ for solely compliance purposes but as a key element of the risk management framework of financial institutions with the ultimate goal of ensuring that the risks faced by the bank are in line with its capital structure. In light of the current financial crisis and the forthcoming increase in legislation on regulatory capital, the integration of regulatory capital requirements in the risk management framework has become more important than ever. In this context, the efficient use and allocation of regulatory capital and the ability of banks to quickly adjust to dynamic regulatory landscapes will constitute competitive advantages in the coming challenging Private Banking market place.
With our industry experience, well-proven and client-tailored Basel II assurance and advisory approach we can support you in the full compliance with Basel II, optimisation of regulatory capital and its integration in your risk management framework. Through our detailed gap analysis, we first examine your current compliance level with the Basel II framework. On the basis of the results of this analysis, we suggest adjustments in order to improve the computation of regulatory capital and hence optimise its use and allocation by considering the whole spectrum of regulatory provisions applicable to your business and risk profile. Finally, we give advice on how to best integrate the Basel II accord in your current risk management framework. In our assurance and advisory approach, we consider the current applicable regulatory framework and potential changes in the capital regulatory landscape in order to determine its impact in your business.