Second, as I also noted earlier, Basel II capital requirements are intended not only to be more sensitive to risk but also to link that risk-sensitivity to a significant  BIS Review 56/2003  3  increase in the standards for risk measurement and management at larger banks. Only the A-IRB and the AMA approaches fully impose that prerequisite on the large entities.
The U.S. authorities believe that the largest U.S. banking organizations should adopt best-practice risk measurement and management for reasons of safety and soundness. Third, Basel II is not without cost.