According to a survey conducted on behalf of Ernst & Young found that most banks believe that BASEL II will change the competitive landscape of banking:

 Large groups with the most sophisticated risk modeling systems will benefit at the expense of smaller banks that have been slow to adopt the BASEL II framework

  • Ability to leverage risk data will lead to competitive advantage
  • Risk modeling and quality of information will be key
  • BASEL II will have the most effect on pricing in the wholesale and commercial real estate, mortgages and derivatives
  • The average cost of implementing BASEL II is US$ 70 million, which is regarded as understated
  • Banks are still mostly focused on devising, validating and implementing their risk models
BIIA Newsletter May – 2006 Issue