Basel II is an international accord agreed by the Basel Committee of Banking Supervision made up of a group of developed countries - an expanded G10. It is important to agree a set of international bank capital standards to ensure a level playing field for competition and to ensure adequate safeguards - as banks and banking is global so is the risk including the risk of contagion. However, Basel II contains many alternatives, those alternatives are calibrated for G10 countries and there are some areas that are important for LAC, which are not considered. What is happening at present is that different countries in the region are adopting different Basel II alternatives and doing their own thing regarding the very many specific issues involved. Given the Basel II framework is so wide and in many instances imprecise, there is a strong need for a regional effort to agree a common adaptation for LAC. This would have multiple benefits. First by analyzing the issue in several emerging economies an appropriate standard for those countries could be found - difficult to achieve with information on just one country. Second, the likely result from what is happening at present is not a level playing field. As international banks operate across the region and regional banks increase their activities, a common adaptation would help re create that objective and simplify cross-border issues immensely. Third, an effort in this direction would only serve to enhance cooperation within the region on financial supervision, particularly important where there is considerable financial integration. Fourth, a standard adaptation for LAC would take into account the many emerging economy issues present and provide a useful counterweight to the current agreement, written largely with G10 in mind.
Project Detail
Country
Regional
Project Number
RG-T1300
Approval Date
October 17, 2007
Project Status
Closed
Project Type
Technical Cooperation
Sector
FINANCIAL MARKETS
Subsector
CAPITAL MARKET DEVELOPMENT
Lending Instrument
-
Lending Instrument Code
-
Modality
-
Facility Type
-
Environmental and Social Impact Category (ESIC)
-
Total Cost
USD 150,000.00
Country Counterpart Financing
USD 0.00
Original Amount Approved
USD 150,000.00
Operation Number | Lending Type | Reporting Currency | Reporting Date | Signed Date | Fund | Financial Instrument |
---|---|---|---|---|---|---|
ATN/SF-10626-RG | Sovereign Guaranteed | USD - United States Dollar | Fund for Special Operations |
- Lending Type: Sovereign Guaranteed
- Reporting Currency: USD - United States Dollar
- Reporting Date:
- Signed Date:
- Fund: Fund for Special Operations
- Financial Instrument: