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Basel II

Basel II represents the most fundamental change seen in financial services capital regulation in the past 15 years and is a top level business issue that has far reaching strategic implications for:

  • Market structure
  • Product design
  • Customer selection
  • Pricing

Focusing on the changes needed to optimise Basel II's business impact could turn Basel II into a competitive boon, rather than a regulatory burden.

Timely rewards for integrated approach

Most organisations are now well into Basel ll preparation and will have the necessary models and data collection activities to comply with the 1 January 2007 "go live" date.

Successful organisations are likely to include some or all the following:

  • Organisations which invest wisely in risk management
  • Banks with large retail portfolios, especially secured
  • Larger lenders with sophisticated treasury operations
  • Banks able to micro-segment markets to identify capital efficient lending opportunities
  • Banks with high grade corporate credits
  • Collateral-efficient institutions
  • Institutions able to demonstrate that they are good at managing operational risk
  • Smarter banks will also have managed the cross-over with IAS/IFRS and are driving for a transformation in the finance and risk management functions as part of their Basel II implementation

Unsuccessful organisations could be those with all or some of the following unless they take remedial action:

  • Low retail exposures
  • Significant specialised lending
  • Large equity holdings or smaller banks with comparatively unsophisticated risk management systems
  • Poor operational risk experience – those who securitise need to tread carefully

Market leading advice

Deloitte is a leading adviser on Basel II.

Basel II is a multi-faceted challenge requiring a multi-disciplinary solution. We are the only adviser able to provide the required breadth of service. In addition, the wealth of experience that our team has built-up, combined with our developed software and tools, will enable you to take months off implementation timelines and so get ahead of the game.

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