The tortuous and protracted path to implementation of Basel II has taken another unexpected turn in the USA, whereby US Banks may revert to a more simplified risk management applications.
The story so far illustrates the power of the factional lobbyist, politicians and those who wish to stifle US domestic competitive advantage, as well as infringing the economic rights of stakeholders in those enterprises. Initially, the US Banking Regulators determined to apply Basel II to the “20 or so largest banking institutions—those with a global operations.” By application of advanced risk management techniques it was contended that these 20 or so institutions could have reduced their capital requirements to such an extent that it would have given them a significant competitive advantage over other financial institutions, which are subject to US domestic equivalent capital adequacy regulation.
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