Basel II - International Convergence of Capital Measurement and Capital Standards

1 Introduction

Central bankers from around the world have joined with the aim of producing uniformity in the way banks and banking regulators approach risk management across national borders. 

Under the auspices of the Basel Committee on Banking Supervision (BCBS) in Basel, Switzerland, the system developed is known as the International Convergence of Capital Measurement and Capital Standards - A Revised Framework, or affectionately known as the Basel Accord, or Basel for short.

A central bank is often known as reserve bank or monetary authority. There are typically responsible for the monetary policy of a country or of a group of member states, such as the European Union. Their primary role is to develop consistency in the way banks and banking regulators approach risk management across national borders. In particular they maintain the stability of the national currency and money supply; as well as being involved in controlling loan interest rates, and acting as a last resort lender to the banking industry during times of financial crisis.

 
Basel II, also called The New Accord, is the second Basel Accord and represents recommendations by bank supervisors and central bankers from countries including Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, Switzerland, the United Kingdom and the United States), Luxembourg and Spain.

2 What are the problems and challenges we will face?

Reality one: Basel II regulations are written in complex confusing language that most people have difficulty understanding and complying with. This includes your staff, suppliers, contractors, lawyers, translators and consultants.

Reality two: There are unnecessary costs for not complying and ‘ignorance’ is no excuse in the eyes of the law.

Reality three: There is a simple system that will help your people ensure:

This system is called Mustor Management and is governed by the MIS 10 000 standard.

At the 2005 International Plain Legal Language Conference in Washington DC , the conference summary speaker Mr Christopher Balmford, described Mustor Management as “the most exciting development in our field at the moment”. 

This system will make it easier for your people to: