Australian Credit Unions Yet To Incorporate Basel II
Australian Credit Unions Yet To Incorporate Basel II
May 26, 2006: According to a survey conducted by Attain IT, only nine % senior management and board members at the nation’s credit unions claim their Basel II compliance is complete or ready for implementation. In fact, a shocking 61 % are unaware of the deadline!
With only eighteen months to go before Basel II recommendations are due to be implemented, this survey was conducted at the recent Australasian Credit Union Institute conference in Canberra. Astoundingly, only half of the 185 respondents surveyed, claimed to have a policy to meet the requirements for Basel II. One-third of them was unsure or did not know if their credit union had begun the process. Moreover, 45 % respondents said their credit union had not selected a solution to handle the process, while 39 per cent were even unsure of the solution selected.
“As always, the early adopters have acquired knowledge early, made their early mistakes and are now well ahead of the followers. This will provide them with better risk ratings and more effective use of capital. It may be too soon to tell but it is likely that the leaders may have their eyes on the laggards for potential take-over targets given their better capital utilisation,” says Philip Parton, managing director, Attain IT.
For the Attain IT survey, senior managers (58 %) and directors (36 %) made up the bulk of the respondents. A small number of sales, marketing and administration (6 %) personnel completed the sample audience.
Basel II represents recommendations by bank supervisors and central bankers from 12 countries making up the Basel Committee on Banking Supervision to revise the international standards for measuring the adequacy of a bank’s capital. It was created to promote greater consistency in the way banks and banking regulators approach risk management across national borders.
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