However, any other bank that meets the qualifying internal infrastructure standards for risk measurement and management could choose to apply these versions of Basel II. We anticipate another ten or so large banks may opt to do so voluntarily because of the greater risk sensitivity it affords.
These banks may also make this choice for prestige or competitive reasons, as counterparties look for indications of technical risk measurement skills at the large banking entities with which they deal. U.S. authorities have agreed to implement only the most advanced Basel II options and to limit the number of required participants. First and foremost, the decision reflects a balancing of costs and benefits.