The Basel Accord provides an opportunity for developing common standards; yet it requires a much closer cooperation, information sharing and coordination of policies. In many developing countries, only the banks are coming under the ambit of Basel II and not other financial services providers, thus creating some scope of regulatory arbitrage.
6 The presence of a large number of internationally active banks in the region requires close cooperation among supervisors across the globe to resolve the home-host issues. It would become all the more important for the jurisdictions where the approaches for Basel II would differ.