Published: Dec 1, 2010 00:46 Updated: Dec 1, 2010 00:46
MANAMA: Banks across the GCC generally and specifically in Bahrain are well positioned to implement the Basel III regulations without any difficulty, according to experts at the KPMG.
"Banks across the GCC and in Bahrain have adequate quality of capital to meet the new guidelines of capital adequacy in the Basel III guidelines," said Peter Kohut, head of Financial Risk Management for KPMG Bahrain and Qatar.
Kohut, who was joined by Steven Hall, a senior member of KPMG’s regulatory practice in the UK, was talking to reporters after a briefing on new financial banking principles, known as Basel III, designed to stabilize the global financial system.
Hosted by KPMG, the global audit, tax and advisory firm, the seminar focused on the recently-released Basel III regulations and its impact on financial organizations and was attended more than 60 senior bankers from 30 leading Bahrain financial institutions.
“Bankers are asking us about the relevance of Basel III in Bahrain, how the new rules will impact local banks’ capital position and what the implications are for risk management, finance or financial systems,” said Kohut.
“The typical headline elements of Basel III on the new capital requirements, which are most relevant for European or American banks, appear to be of limited impact for local banks. However, there are still a number of less talked about items as well as some important indirect or second order effects of Basel III which regional banks should consider.”
"The banks need to look into the data requirements and necessary infrastructure necessitated by the Basell III committee on the banks and financial institutions for adoption to the new business model by 2019," he added.
However, Kohut, admitted that the new Basel guidelines will require a lot of funds and the IMF will likely to ensure that those additional capital requirements should be addressed in case capital is needed.
“Aside from the obvious need to improve capital and liquidity management, regional banks will need to consider more than before whether their strategic, business and product specific decisions take sufficient account of the inherent uncertainties and opportunities caused by the increasing dynamic complexities of the financial markets," Peter added.
"The adoption to the new business model of Basel III will impact the banks' profitability and liquidity position at least in the short term," said Steven Hall a senior member of KPMG’s regulatory practice.
This is, he said, yet to be seen that how the global banking community will respond to the new guidelines or how it will look like after the implementation of the same.
The participants also heard from Johanne C. Prevost, adviser regulatory policy at the Central Bank of Bahrain and Rajesh Menon, KPMG Qatar advisory partner.
In addition, the seminar discussed how financial institutions around the world are preparing to address the requirements of the new regulation and whether this will lead to safer banking and more resilient financial systems
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