Ladies and Gentlemen, without any doubt: the implementation of Basel II is a significant challenge for both, banks and supervisory authorities. This holds especially true for countries where a high number of banks are planning to use their internal risk measurement methods for supervisory purposes as well. It was the intention of my speech to deliver three key messages: 1.
The second pillar of Basel II is a significant, vital part of the whole framework. Its scope in covering the risks banks are facing is much wider than the concept of minimum capital requirements in Pillar 1. 2. Supervisors need to prepare guidelines for their institutions and manuals for themselves how to act under Pillar 2.