The Department’s effort to implement Basel II – the Basel Committee’s revised capital framework – on 1 January 2008 was a major exercise undertaken over several years.
Accordingly, the discussions in the Annual Report 2007 as detailed in chapter 2, describe a holistic view of Basel II implementation from the start of the process, shortly after the millennium change, up to the date of implementation.
The discussion covers the process of incorporating Basel II into the regulatory framework, along with the development, implementation and embedding of the following elements of Basel II:
• Pillar 1, relating to the determination of the minimum required regulatory capital in respect of credit, market and operational risk, including the application and approval processes that were followed in respect of credit and operational risk, where banks targeted approaches other than the base approaches, the quantitative impact studies, field tests and parallel runs, and the recognition of eligible external credit assessment institutions.
• Pillar 2, relating to capital management, including the initial internal capital adequacy assessment process (ICAAP) assessments and the updating of the supervisory review and evaluation process (SREP).
• Pillar 3, relating to market discipline, which included industry training.
Click on link for Basel II related Banks Act Circulars:
Banks Act Circular 15/2004
Banks Act Circular 12/2004
Banks Act Circular 06/2004
Banks Act Circular 02/2004