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Basel II (Basel Committee on Banking Supervision) Standard

Please check Bank For International Settlements for updated information.

Basel II is a set of recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision. This standard was initially published in June 2004, is to create an international standard that banking regulators can use when creating regulations about how much capital banks need to put aside to guard against the types of financial and operational risks banks face. Advocates of Basel II believe that such an international standard can help protect the international financial system from the types of problems that might arise should a major bank or a series of banks collapse. In practice, Basel II attempts to accomplish this by setting up rigorous risk and capital management requirements designed to ensure that a bank holds capital reserves appropriate to the risk the bank exposes itself to through its lending and investment practices. Generally speaking, these rules mean that the greater risk to which the bank is exposed, the greater the amount of capital the bank needs to hold to safeguard its solvency and overall economic stability.

The final version aims at:

  • Ensuring that capital allocation is more risk sensitive;
  • Separating operational risk from credit risk, and quantifying both;
  • Attempting to align economic and regulatory capital more closely to reduce the scope for regulatory arbitrage.

The three challenges addressed by the Basel II standard:

  • managing and mitigating operational risk;
  • tracking and centralizing event loss data;
  • adopting disclosure policies, controls and assessment processes.

ATL and Basel II

ATL's configuration control solution provides powerful configuration assessment and change auditing capabilities to help organisations proactively assess their IT configurations to see how they measure up to Basel II. For configurations that don't measure up, there is remediation guidance which walks you through getting those settings to the correct values. Once this known state has been achieved, ATL's change auditing solution monitors for changes that could affect compliance to your Basel II policies, maintaining a known state of your IT infrastructure.

The standard itself is generic and can be applied to any system or product. 

Audience

Anyone that wants to introduce banking security processes into a project or organisation.

Resources:

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