| Implementation of Basel II in Australia
The Basel Committee has made all but the most sophisticated approaches for credit and operational risk available for implementation from year end 2006, and the most sophisticated approaches from year end 2007. The actual starting date has, however, been left to the discretion of regulatory authorities in each country. Following consultation with industry participants, APRA has decided on a common implementation date from year end 2007 for all approaches. Amongst other things, this will allow institutions adopting the less sophisticated approaches an additional year to make the necessary system changes. APRA’s chairman, Dr John Laker, said that the Basel II framework will generate substantial benefits for the global and Australian banking systems. He promised that: “APRA will be working closely with ADIs on the improvements to risk measurement, risk management and data management necessary for this Framework to succeed.” APRA had previously advised ADIs that full implementation of the conglomerate capital adequacy regime would be postponed until 1st January 2007 to coincide with the timetable of the Basel II framework. The capital base on which large exposure limits are applied would also change at the same time. These changes will now come into effect from year end 2007. However, APRA may still apply the new conglomerates regime to an ADI in respect of any new material acquisitions made before this date.
•Date:
4th Nov 2004 • Region: Australia •Type:
Article •Topic: Operational
risk |
