Basel IIs impact

By Lisa Vaas  |  Posted 2004-02-10 Print this article Print

Regulatory requirements have proliferated madly since 9/11 and the Enron debacle, with the passage of regulations controlling data privacy, risk and compliance that include HIPAA, Sarbanes-Oxley, the Patriot Act and Basel II. That heady mix of regulations is now the biggest pain point for IBMs business intelligence customers, Parrish said. "Our customers are being driven by tremendous regulatory environments," she said. Basel II is considered by some experts to be the next Y2K or Euro conversion project when it comes to the overhauling of systems it will entail. Forrester Research pegs IT budgets for the conversion between $20 million and $30 million for large banks. In early 2003, industry estimates said that between one-third and one-half of banks were not sufficiently prepared for Basel II. Systems integration is one of the major challenges of Basel II and is likely one of the most significant hitches holding banks up, according to Jost Hoppermann, vice president of Giga Research, a division of Forrester Research.
The situation has improved somewhat since then, Hoppermann said, but there are still banks that will be caught unprepared when the final deadline for compliance arrives in 2006. "[Unprepared banks] will consequently not be able to use more sophisticated Basel II approaches, probably resulting, for example, in higher capital adequacy requirements, depending on their credit portfolio," he said.
Next page: One banks Basel II odyssey.

Lisa Vaas is News Editor/Operations for and also serves as editor of the Database topic center. Since 1995, she has also been a Webcast news show anchorperson and a reporter covering the IT industry. She has focused on customer relationship management technology, IT salaries and careers, effects of the H1-B visa on the technology workforce, wireless technology, security, and, most recently, databases and the technologies that touch upon them. Her articles have appeared in eWEEK's print edition, on, and in the startup IT magazine PC Connection. Prior to becoming a journalist, Vaas experienced an array of eye-opening careers, including driving a cab in Boston, photographing cranky babies in shopping malls, selling cameras, typography and computer training. She stopped a hair short of finishing an M.A. in English at the University of Massachusetts in Boston. She earned a B.S. in Communications from Emerson College. She runs two open-mic reading series in Boston and currently keeps bees in her home in Mashpee, Mass.

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