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Basel II
The Basel II Framework (or simply, Basel II) was introduced by the Basel Committee
on Banking Supervision (BCBS) in June 2004 to replace the 1988 Capital Accord (Basel
I). The introduction of the new capital framework was prompted by considerable economic
changes that took place in the world financial system in the years following the
1988 Accord. These changes led to innovations in banks and made the risk profiles
of banks more complex and challenging. To this end, the BCBS had to come up with
a new capital adequacy framework that would reflect new banking risk profile.
Basel II, thus, differs from Basel I in that it is more reflective of the underlying
banking risks and provides stronger incentives for banks to improve their risk management.
The BCBS proposes to permit banks to choose among two methodologies for calculating
their capital requirements. One alternative will be to measure credit, operational
and market risks in a standardised manner, supported by external credit assessments.
The other alternative methodology, which is subject to the explicit approval of
the bank’s regulator, would allow banks to use their internal ratings systems.
The Bank of Namibia has selected to implement the standardised approach in Namibia
by 2010. The implementation of Basel II requires substantial resource commitment
both on the part of the banks and regulator. Therefore, religious buy-in and committed
strategies from all parties are needed to take the necessary steps to ensure timely
and smooth implementation.
Following the decision to implement Basel II by 2010, the Banking Supervision Department
together with the banks in Namibia formed a Basel II project implementation team.
The latter came up with a project charter and dedicated work schedules, outlining
the phases and activities leading to the successful roll-out.
Namibian Basel II Project Plan
A phased project approach was chosen to gradually implement the Basel II standardised
approach in Namibia. The table below sets out the extent of progress made so far
on the activities performed and also highlights those that still need to be performed
throughout the project life cycle.
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PHASES |
START DATE |
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Project Initiation & Setup Phase |
Completed |
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Basel Assessment Phase |
01/01/2007 |
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Gap Analysis Phase |
31/11/2008 |
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Execute Phase |
02/01/2009 |
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Parallel Run Phase |
01/07/2009 |
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Go-live Phase |
01/01/2010 |
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Conclude Project Phase |
01/04/2010 |
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Repo Rate |
7.0000% |
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Prime Rate |
11.2500% |
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NCPI (01/2010) |
6.3% |
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N$/US Dollar |
7.31700 |
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N$/GBP |
11.11740 |
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N$/Euro |
9.95550 |
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Latest
Downloadable Documents |
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External Links
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