South Africa gives Basel II high priority
Implementing the Basel II capital rules for bank safety will be a high priority area for South Africa's banking supervisors over coming years, the head of South Africa's central bank said in December.
Basel II will be implemented for the South African banking sector on January 1, 2008, South African Reserve Bank governor Tito Mboweni told an end-year media reception.
Parallel running of the Basel II accord with the current, and simpler, Basel I capital adequacy rules will take place in 2007.
He said supervisors will continue to direct resources towards developing a supervisory framework involving all approaches to measuring risk offered under the complex, risk-focused Basel II pact.
Basel II will have a significant impact not only on banks but also on supervisors, Mboweni said. Supervisors will "have to re-engineer their processes and tailor their organisational structures to meet the Basel II standards".
This requires a though understanding of the provisions of Basel II, the design of appropriate supervisory processes and the development of supervisory tools, he said.
Co-operation between banks and supervisors, between supervisors of different countries and between different banks is therefore essential for the successful implementation of Basel II.
South Africa's Accord Implementation Forum for banks and other stakeholders in Basel II is functioning well, Mboweni said.
