Bank of Israel still seeks compliance with Basel II by 2009

The Bank of Israel yesterday distributed among the banks draft instructions on a revised work framework for Basel II.

Supervisor of Banks Rony Hizkiyahu is continuing to strive for compliance with Basel II - The New Basel Capital Accord of the Basel Committee on Banking Supervision - by Israel’s banking system. The Bank of Israel yesterday distributed among the banks draft instructions on a revised work framework for Basel II.

Hizkiyahu again made it clear that, “Every banking corporation will be required to take measures to ensure that it will be ready to apply Basel II in 2009.”

The Bank of Israel said, “When first applying Basel II, every banking corporation will apply the approach suited to its level of readiness.”

Hizkiyahu has previously said that the Bank of Israel would adopt the final version of Basel II of June 2006.

The draft directive mentions the standard approach for calculating minimum capital needs for credit risk, market risk, and operating risk in accordance with the guidelines set out by the Basel II committee. The Banking Supervision Department will meet with bank representatives over the coming months to discuss implementation of the model.

The Basel II guidelines, published in June 2004, are coming into effect in the EU and large US banks this year. Most countries will complete compliance with Basel II by the end of 2008. Adopting the guidelines is expected to enable banks to maintain lower capital adequacy ratios that are better adjusted to risk.

Published by Globes [online], Israel business news - www.globes.co.il - on April 5, 2007

© Copyright of Globes Publisher Itonut (1983) Ltd. 2007

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