Indeed, one of the more desirable aspects of Basel II is that it anticipates that it can evolve with best industry practices without creating a new framework. The designers have not intended to build a straitjacket, and the policymakers have insisted on this characteristic, which my colleague Vice Chairman Ferguson has referred to as Basel II’s “evergreen” aspect.
Enterprise-wide risk management Within financial institutions, the better and greater focus on risk measurement has helped to bridge the gap between the perspective of the traditional credit risk officer and that of the “quant.” This is no small accomplishment, and a significant advance in credit culture.