Executive Briefing Session on the Implementation of Basel II in Hong Kong

The Hong Kong Monetary Authority (HKMA) today (Monday) hosted a briefing session on the implementation of the New Basel Capital Adequacy Standards (Basel II) in Hong Kong for more than 140 senior executives of locally incorporated authorized institutions (AIs).

The purpose of the briefing was for the HKMA to provide an overview of Basel II, to explain some of the key differences to the current regime, to highlight some of the business implications of the revised framework, and to receive feedback from the local banking sector.

Speaking at the briefing, Mr William Ryback, the HKMA Deputy Chief Executive, said "implementation of Basel II in Hong Kong is now only ten months away, so authorized institutions need to make sure they are ready in time". He also said "at the HKMA the policy-setting stage is nearly complete and rule-making is in progress".

At the core of the briefing, Mr Simon Topping, the HKMA Executive Director (Banking Policy), discussed the underlying objectives of Basel II of encouraging development of higher risk and capital management standards and enhanced disclosure, which lie beyond mere regulatory compliance with the minimum capital adequacy ratio. He also drew participants' particular attention to the business implications for AIs, such as on credit risk, operational risk and capital management, strategic planning and competitive dynamics when Basel II is implemented.

In conclusion, Mr Ryback said that Basel II should not be seen as just a compliance issue, as there are a lot of important business issues involved, and it can help improve risk management. Implementation can enhance AIs' reputation and standing and the stability and effective working of the banking sector.

For further enquiries, please contact:
Jasmin Fung, Manager (Press), at 2878 8246 or
Hing-Fung Wong, Resource Co-ordinator, at 2878 1802

Hong Kong Monetary Authority
20 February 2006