Basel II

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Basel II is finalized. Now the real work of interpreting and implementing the Framework—and using its implementation as a springboard to improve business processes and performance—can begin in earnest.

Clearly, Basel II will have an impact in the form of increased operating costs, revised IT budgets, increasing consultancy expenditures and competition within the banking sector. Moreover, key challenges still remain in grey area for globally active banks, ranging from the operational risk matters to ensuring the consistency of application across different jurisdictions, markets and geographical segments.

Nevertheless, the markets as well as regulatory bodies envisage that the banks are likely to benefit directly or indirectly as a result of the Revised Framework in the form of enhanced global stability, global regulatory consistency, improved internal systems and processes, and enhanced decision making capabilities.

In parallel with the Globe, we observed a significant increase in Turkey over recent years in the awareness and focus on regulatory and compliance practices. In particular, fundamental changes to capital adequacy in parallel with Basel II represent now a challenge to the industry. Existing financial service institutions and those considering locating in Turkey must ensure that they keep abreast of new BRSA Road Map of Turkey on one side, and ever-changing EU directives and other international regulatory developments on the other. Focusing on Basel II challenge, developing efficient internal systems and processes, and ensuring (while benefiting from) Basel II compliance appears as an imperative for success in Turkish financial markets.

We in PwC Turkey help our clients respond to this regulatory imperative, while building a risk and capital blueprint in support of strategy and competition. Our purpose is never the compliance only; we achieve compliance ‘and’ help our clients turn compliance into an opportunity to strengthen their confidence in the business.

For this purpose we possess a global and local repository of varied-skills resources with considerable experience to successfully meet your needs for such a demanding & complex engagement. Our global network of specialists continues to help you develop an effective and cost-efficient approach to your Basel II compliance.

Our Basel II related services could be grouped in three major types of workstreams:

1- Foundation Workstreams

  • Strategic and business impact assessment
  • Gap Analysis (supported by Basel II Diagnostic Tool which provides for a comprehensive assessment of Basel II gaps for all approaches)
  • Target operating model and systems architecture
  • Project Definition

2- Implementation Workstreams

  • Risk & Capital Management Framework
  • Rating model development
  • Rating model validation (supported by a robust service offering and expert resources)
  • Credit and Operational Risk activities, including architecture, data inputs, data collection
  • Financial reporting and disclosure (integration with IFRS)

3- Supporting Workstreams

  • Programme management
  • Regulatory support and advice
  • Training
  • Change management
  • Pre-validation support / documentation