The Bank for International Settlements' Basel Committee began revising the original 1988 Basel Accord in the late 1990s to align capital more sensitively with risk, and to spur banks to improve their risk management. The new regime is scheduled to be in place in 2005. Still, for many banks, perception of the Basel II Accord is like the distant whistle from an approaching train: something big is near, but, because it can't be seen, they feel there is no reason to worry about it.
Though progress towards a final version of Basel II is painfully slow, it will arrive. Those banks that make the investment now will gain a significant upper hand.
Read “Reality Check on Basel II, ,” a special supplement in The Banker, which summarizes the results of a FT research study on how banks are approaching the implementation of Basel II.
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