Basel II Accord advantages highlighted

Basel II Accord has made the banking more efficient, less risk-prone and progressive in nature. This was observed in a seminar on 'Basel-II' organised by Pakistan Banks' Association on Tuesday. State Bank Governor Dr Ishrat Husain expressed hope that the seminar would go a long way in creating the necessary awareness in the banks to implement the international standards in accordance with the Basel-II Accord.
The high-tech seminar was widely attended by bankers from across the country and banking dignitaries from abroad. Most of the speakers stressed need for creating awareness about the Basel-II Accord and expressed confidence that the Basel-II would bring extremely helpful results for the banking industry and save it from unavoidable risks lying within the system.
The development of new financial products, introduction of e-banking has increased the exposure of banks to operational lags which it is expected will be mitigated through introduction of capital change, said the Dr Hussain. He said the introduction of market discipline as a pillar to the new Accord re-emphasises the role of markets in bringing discipline in the banking industry.
A strong healthy and vibrant banking system equipped with the state-of-the-art technology base is one of the main objectives of the State Bank of Pakistan which can be achieved through the implementation of the Basel-II Accord, said the SBP Governor.
"I hope this seminar will be helpful in understanding Basel-II Capital Accord, which is directly needed at this stage for successful implementation of this international standard," he said.
Michael Ainley, Head of Wholesale Banks Department Financial Services Authority presented a detailed explanation of Basel-II. He also discussed Basel-I in detail.
R. Balaram, General Manager Risk Management State Bank of India also presented his paper and discussed the Basel-II and observed that the implementation of the Accord would improved the banking industry.
Chairman, Pakistan Banks' Association, Shaukat Tarin said the Basel-II seminar would highlight the importance of the Basel-II and how it helps in monitoring the banking business.