Basel II Implementation to Make Banking System Safer Despite Expected Decrease in Capital, According to PRMIA Survey
PRMIA today announced preliminary findings from a recent survey of its members regarding Basel II Implementation Risk. The survey of over 1,100 bankers, consultants and regulators from over 85 countries who are active in Basel II implementation, was concluded July 13, 2007.
Among the early results being released:
• Over 90% of bankers feel that the application of Basel II norms for all players in the market promotes better risk management.
• Almost 80% of respondents believe that Basel II implementation will make the banking system sounder (more stable), while just 4% thought the system would be less sound (less stable).
• At the same time over 50% of bankers say their capital requirements will fall under Basel II.
• 36% of bankers say their capital requirements will fall by more than 10% and just over 13% say they will increase by more than 10%.
• Among those identifying themselves as coming from the largest banks in their countries, 42% said they expected their capital requirements to fall by more than 10% under Basel II, while just 12% expect required capital to increase by more than 10%.
A majority of the bankers who participated in the survey come from institutions that are among the largest in their countries, with nearly 50% saying they plan to implement the Advanced approaches to Basel II.