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Welcome to the Basel ii Compliance
Portal
First of all, thank you for visiting our pages. We hope that
you'll find a lot of information about the Basel ii Accord and
market, the challenges and the opportunities. Perhaps
you will find interesting our approach: To use compliance as a
competitive advantage.
Basel iii Accord: News, Alerts, Information,
Training, Certification, Membership to the Basel iii Compliance
professionals Association (BiiiCPA)
1.
Basel iii
Accord
2.
Basel iii
Association
3.
Basel iii
Training
Overview of
the Basel Committee's reform programme and the market failures
it addresses - December 2009
The objective of the Basel Committee's reform package is to
improve the banking sector's ability to absorb shocks arising
from financial and
economic stress, whatever the source,
thus reducing the risk of spillover
from the financial sector to the real
economy.
Through its reform package, the Committee aims
to improve risk management and governance as well as strengthen
banks' transparency and disclosures.
Moreover, the
reform package includes the Committee's efforts to strengthen
the resolution of systemically significant cross-border banks.
The Committee's reforms are part of
the global initiatives to strengthen the financial regulatory
system that have been endorsed by the Financial Stability Board
(FSB) and the G20 Leaders.
A strong and resilient
banking system is the foundation for sustainable economic
growth, as banks are at the centre of the credit intermediation
process between savers and investors.
Moreover, banks
provide critical services to consumers, small and medium-sized
enterprises, large corporate firms and governments who rely on
them to conduct their daily business, both at a domestic and
international level.
One of the main reasons the
economic and financial crisis became so severe was that the
banking sectors of many countries had built up excessive on- and
off-balance sheet leverage.
This was accompanied by a
gradual erosion of the level and
quality of the capital base.
At the same time,
many banks were holding insufficient liquidity buffers.
The banking system therefore was not able to absorb the
resulting systemic trading and credit losses nor could it cope
with the reintermediation of large off-balance sheet exposures
that had built up in the shadow banking system.
The
crisis was further amplified by a procyclical deleveraging
process and by the interconnectedness of systemic institutions
through an array of complex transactions.
During the
most severe episode of the crisis, the market lost confidence in
the solvency and liquidity of many banking institutions.
The weaknesses in the banking sector were transmitted to the
rest of the financial system and the real economy, resulting in
a massive contraction of liquidity and credit availability.
Ultimately the public sector had to step in with
unprecedented injections of
liquidity, capital support and guarantees, exposing the taxpayer
to large losses.
The effect on banks, financial
systems and economies at the epicentre of the crisis was
immediate. However, the crisis also spread to a wider circle of
countries around the globe.
For these countries the
transmission channels were less direct, resulting from a severe
contraction in global liquidity, cross border credit
availability and demand for exports.
Given the scope
and speed with which the current and previous crises have been
transmitted around the globe, it is critical that all countries
raise the resilience of their banking sectors to both internal
and external shocks.
To address the market failures
revealed by the crisis, the Committee is introducing a number of
fundamental reforms to the international regulatory framework.
The reforms strengthen bank-level, or microprudential,
regulation, which will help raise the resilience of individual
banking institutions to periods of stress.
The reforms
also have a macroprudential focus, addressing system wide risks
that can build up across the banking sector as well as the
procyclical amplification of these risks over time.
Clearly these two micro and macroprudential approaches to
supervision are interrelated, as greater resilience at the
individual bank level reduces the risk of system wide shocks.
Building on the agreements reached at the 6 September
2009 meeting of the Basel Committee's governing body, the key
elements of the proposals the Committee is issuing for
consultation are the following:
First, the quality,
consistency, and transparency of the capital base will be
raised.
This will ensure that large, internationally
active banks are in a better position to absorb losses on both a
going concern and gone concern basis.
For example,
under the current Basel Committee standard, banks could hold as
little as 2% common equity to risk-based assets, before the
application of key regulatory adjustments.
Second, the risk coverage of
the capital framework will be strengthened.
In addition
to the trading book and securitisation reforms announced in July
2009, the Committee is proposing to strengthen the capital
requirements for counterparty credit risk exposures arising from
derivatives, repos, and securities financing activities.
These enhancements will strengthen the resilience of individual
banking institutions and reduce the risk that shocks are
transmitted from one institution to the next through the
derivatives and financing channel.
The strengthened
counterparty capital requirements also will increase incentives
to move OTC derivative exposures to central counterparties and
exchanges.
Third, the
Committee will introduce a leverage ratio as a supplementary
measure to the Basel II risk-based framework with a view to
migrating to a Pillar 1 treatment based on appropriate review
and calibration.
This will help contain the build up of
excessive leverage in the banking system, introduce additional
safeguards against attempts to game the risk based requirements,
and help address model risk.
To ensure comparability,
the details of the leverage ratio will be harmonised
internationally, fully adjusting for any remaining differences
in accounting.
The ratio will be calibrated so that it
serves as a credible supplementary measure to the riskbased
requirements, taking into account the forthcoming changes to the
Basel II framework.
Fourth,
the Committee is introducing a series of measures to promote the
build up of capital buffers in good times that can be drawn upon
in periods of stress.
A countercyclical capital
framework will contribute to a more stable banking system, which
will help dampen, instead of amplify, economic and financial
shocks.
In addition, the Committee is promoting more
forward looking provisioning based on expected losses, which
captures actual losses more transparently and is also less
procyclical than the current "incurred loss" provisioning model.
Fifth, the Committee
is introducing a global minimum liquidity standard for
internationally active banks that includes a 30-day liquidity
coverage ratio requirement underpinned by a longer-term
structural liquidity ratio.
The framework also includes
a common set of monitoring metrics to assist supervisors in
identifying and analysing liquidity risk trends at both the bank
and system wide level.
These standards and monitoring
metrics complement the Committee's Principles for Sound
Liquidity Risk Management and Supervision issued in September
2008.
The Committee also is reviewing the need for
additional capital, liquidity or other supervisory measures to
reduce the externalities created by systemically important
institutions.
Market pressure has already forced the
banking system to raise the level and quality of the capital and
liquidity base. The proposed changes will ensure that these
gains are maintained over the long run, resulting in a banking
sector that is less leveraged, less procyclical and more
resilient to system wide stress.
As announced in the 7
September 2009 press release, the Committee is initiating a
comprehensive impact assessment of the capital and liquidity
standards proposed in this consultative document.
The
impact assessment will be carried out in the first half of 2010.
On the basis of this assessment, the Committee will
then review the regulatory minimum level of capital in the
second half of 2010, taking into account the reforms proposed in
this document to arrive at an appropriately calibrated total
level and quality of capital.
The calibration will
consider all the elements of the Committee's reform package and
will not be conducted on a piecemeal basis.
The fully
calibrated set of standards will be developed by the end of 2010
to be phased in as financial conditions improve and the economic
recovery is assured, with the aim of implementation by end-2012.
Within this context, the Committee also will consider
appropriate transition and grandfathering arrangements.
Taken together, these measures will promote a better balance
between financial innovation, economic efficiency, and
sustainable growth over the long run.
The
Basel Committee
The Basel Committee on Banking
Supervision provides a forum for regular cooperation on banking
supervisory matters.
Its objective is to enhance
understanding of key supervisory issues and improve the quality
of banking supervision worldwide.
It seeks to do so by exchanging
information on national supervisory issues, approaches and
techniques, with a view to promoting common understanding.
At times, the Committee uses
this common understanding to develop guidelines and supervisory
standards in areas where they are considered desirable.
In this regard, the Committee
is best known for its international standards on capital
adequacy; the Core Principles for Effective Banking Supervision;
and the Concordat on cross-border banking supervision.
The Committee's members come from
Argentina, Australia, Belgium, Brazil, Canada, China, France,
Germany, Hong Kong SAR, India, Indonesia, Italy, Japan, Korea,
Luxembourg, Mexico, the Netherlands, Russia, Saudi Arabia,
Singapore, South Africa, Spain, Sweden, Switzerland, Turkey, the
United Kingdom and the United States.
The
Committee encourages contacts and cooperation among its members
and other banking supervisory authorities.
It
circulates to supervisors throughout the world both published
and unpublished papers providing guidance on banking supervisory
matters.
Contacts have been further
strengthened by an International Conference of Banking
Supervisors (ICBS) which takes place every two years.
The Committee's Secretariat is located at the Bank for
International Settlements in Basel, Switzerland, and is staffed
mainly by professional supervisors on temporary secondment from
member institutions.
In addition to undertaking the
secretarial work for the Committee and its many expert
sub-committees, it stands ready to give advice to supervisory
authorities in all countries. Mr Stefan Walter is the Secretary
General of the Basel Committee.
Become a
Certified Basel ii Professional (CBiiPro)
Basel ii Distance Learning and
Certification Program
The Cost:US$
297
What is included in
this price:
A. The official presentations we use in our instructor-led
classes
The presentations
have been updated after the Basel ii Amendment (July 2009,
Enhancements to the Basel II framework, Supplemental Guidance)
B. Up to 3 Online Exams
There is only one
exam you need to pass, in order to become a Certified Basel ii
Professional (CBiiPro).
If you fail, you must study
again the official presentations, but you do not need to spend
money to try again. Up to 3 exams are included in the price.
C. Personalized Membership Certificate printed in full colour.
Processing,
printing, packing and posting to your office or home
MORE INFORMATION ABOUT THE OFFICIAL
PRESENTATIONS
We will send you 3 emails.
The first email (704 slides) covers
all the presentations that are needed for the CBiiPro Exam. All
the questions of the exam are based on these slides.
We cover the Enhancements to the Basel II framework, July 2009,
Supplemental Pillar 2 Guidance
(Supervisory Review Process) from the Bank for International
Settlements
The second and the third emails
cover the implementation of the Basel ii framework
in the United States of America and the
European Economic Area.
There presentations are especially
important for professionals working in multinational or large
financial organizations.
These presentations are:
- Basel II in the United States of America
(235 slides)
-
Regulatory Arbitrage after Basel ii (233 slides)
- The Financial Conglomerates Directive (183 slides)
- The Capital Requirements Directive of the European Economic Area
(426 slides)
The Capital Requirements Directive (CRD) is
the common framework for the implementation of Basel ii in
European Union.
If you understand the CRD, you can work not
only for the implementation of the Basel ii framework in the 30
countries of the European Economic Area, but also around the world
for multinational banks and financial
organizations with European operations.
The presentations not only cover the European directives, but also
include topics like: Hedge Funds and the
Capital Requirements Directive, Securitization and the Capital
Requirements Directive.
QUESTION:
Why in a Basel ii certification program we need to understand the
Financial Conglomerates Directive?
ANSWER:
Because we have a very different Basel ii implementation in
each of the following structures:
A. The bank is the regulated entity at the
head of the group
B. The bank is under a mixed financial holding company (MFHC)
C. The bank is under a financial holding company (FHC)
D. The bank is under an insurance holding company (IHC)
Only the first 704 slides (first email), that cover the Basel ii
principles, are needed for the exam.
To learn more:
www.basel-ii-association.com/Distance_Learning_Online_Certification.htm
Join the Basel ii Compliance Professionals Association (BCPA).
Membership is Free
www.basel-ii-association.com/How_to_become_member.htm
Member Benefits
www.basel-ii-association.com/Member_Benefits.htm
Reading Room
www.basel-ii-association.com/Reading_Room.htm
Read more about our Certified Basel ii Professional
(CBiiPro) program:
www.basel-ii-association.com/Distance_Learning_Online_Certification.htm
Read more about our Certified Pillar 2 Expert (CP2E)
program:
www.basel-ii-association.com/Distance_Learning_Online_Certification_CP2E.htm
Read more about our Certified Pillar 3 Expert (CP3E)
program:
www.basel-ii-association.com/Distance_Learning_Online_Certification_CP3E.htm
Read more about our Certified Stress Testing Expert (CSTE)
program:
www.basel-ii-association.com/Distance_Learning_Online_Certification_CSTE.htm
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Fair, the California Online Privacy Protection Act, the Children
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