Should Chinese banks comply with Basel III standards?
William Isaac, former chairman of FDIC, believes that it is more important that banks develop sound decision-making processes, rather than comply with Basel III rules. May 02, 2013 | Baron LaudermilkAccording to William Isaac, former chairman of the Federal Deposit Insurance Corporation, who recently spoke at the “Building a Strong and Stable Bank – The Role of the CEO in Risk Management” dialogue (organised by The Asian Banker and the Shanghai Banking Association) held in Shanghai on April 26th, Chinese banks should not conform to Basel III rules, but instead rely on sound judgment, wisdom, and experience in running their respective bank operations. Indeed, Isaac’s sentiments were met with much query and comments from the banking delegates and regulators present at the dialogue. Image 1. Participants engage at the “Building a Strong and Stable Bank – The Role of the CEO in Risk Management” dialogue “We do not need massive and complex regulations to ensure that banks are safe. We need strong absolute standards for minimum tangible equity capital to total assets,” said Issac. “We need bankers and regulators who exercise good judgment and have the wisdom and experience to run and oversee banks.” While Chinese banks could learn from their US counterparts in certain areas, Isaac said that the banking industry in the US is far from perfect. Questioning Isaac’s opposition to Basel III compliance, Ma Lixin, deputy director general of the China Banking Regulatory Commission (Shanghai), said, “Chinese banks are learning from and trying to tap into the US market. We are in the process of complying with Basel III rules and hope that the US can take the lead with regards to implementation of these international standards.” Phillip Straley, managing director of Accenture's risk management division, noted that while Basel III compliance is not without its complexities, the positives derived from complying with the rules far outweigh the negatives involved. “Every risk management practitioner knows the adva... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Basel III, Capital & Strategic Issues, China, Risk and Regulationbasel III,Capital & Strategic Issues,China,Risk and Regulation, Basel III,Capital & Strategic Issues,China,Risk and Regulation, Keywords:William Isaac, FDIC, Ma Lixin, CBRC, Shanghai Banking Association, Shanghai Banking Association, Accenture, Phillip Straley William Isaac, FDIC, Ma Lixin, CBRC, Shanghai Banking Association, Shanghai Banking Association, Accenture, Phillip Straley
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