The Bahrain Monetary Agency (BMA) yesterday (Wednesday 7th June 2006) hosted a high-level seminar for board members, on the corporate governance implications of the new Basel II capital adequacy framework. Organised in conjunction with the Institute of International Finance (IIF) , the global association of financial institutions, the event attracted a capacity audience, with around 80 board members attending.
Senior overseas speakers, representing the IIF, Gregory P. Wilson consulting, the UK law firm Allen & Overy, Ernst and Young, and FitchRatings, gave presentations on different aspects of Basel II, and its relevance to bank directors. The Governor of the BMA, Rasheed M. Al-Maraj, gave an introductory speech, whilst the Deputy Managing Director of the IIF, Peter McCarthy, presided over the presentations.
The Governor commented, “This initiative forms part of our on-going efforts to prepare Bahrain for implementation of Basel II. Although there have been many conferences addressing the subject, this is the first such to be specifically targeted at bank directors. Banks that successfully implement Basel II can secure significant competitive advantages; this is one way the BMA can help banks prepare adequately.”
Peter McCarthy commented, "The IIF is pleased to join with the BMA in promoting understanding of Basel II. The new regulatory framework will pose significant challenges and the IIF assigns the highest priority to working with its member financial services institutions and with the regulatory authorities to contribute to preparing the way for the eventual implementation of the framework. We look forward to further meetings in this region on this important subject and to further cooperation with the BMA."
Among the issues addressed, was the need for bank boards to make sure they understood their responsibilities under the Basel II framework; to consider the strategic implications of Basel II, including its impact on pricing and the competitive landscape; and, finally, the need for bank boards to ensure that adequate management information and internal processes are in place to meet Basel II requirements.
The seminar formed part of on-going efforts by BMA to prepare for the implementation of Basel II. Besides conferences and seminars aimed at raising awareness levels, the BMA established in 2005 four industry working groups, each focused on a specific policy area. Following the recent completion of the work of these groups, the BMA will be publishing by the late summer draft implementing regulations, for public comment. These will be finalised and issued in 2007, to allow a sufficient transition period prior to implementation in 2008.
