Cayman Islands To Implement Basel II From 2010

The Board of the Cayman Islands Monetary Authority (CIMA) has approved the implementation of the new Basel II framework in the Cayman Islands between 2010 and 2012.

CIMA announced on September 24 that the implementation of Basel II will occur following a preparation process that will include policy development, new reporting requirements, and a measured pace of consultations with the Cayman Islands banking industry. The preparation process has begun with the search for a Basel II Implementation Project Manager.

The initial focus will be on requiring Cayman incorporated banks to implement the standardized approaches under Pillar 1 by the end of 2010, with a staged implementation of Pillars 2 and 3 between 2010 and 2012. Further consideration will be given to the more advanced approaches thereafter.

The Basel II Framework was developed by the Basel Committee on Banking Supervision, and is a new global supervisory framework for assessing the capital adequacy of international banks. Most G-10 countries and many other banking supervisors, including those of major international financial services centres, plan to implement the framework over the next few years.

CIMA stated that the standardized approaches under Basel II will facilitate the Cayman banking industry's risk profile and business mix, while enhancing its risk measurement and management practices.

Cayman's banking industry currently comprises 280 banks from over 40 countries, of which approximately 100 will be directly impacted by the implementation of the Basel II framework.

LawAndTax-News.com