Basel II builds on the existing riskmanagement approaches of well-managed banks and creates incentives for banks to move toward leading-edge risk-measurement and risk-management practices. By providing a consistent framework for all banks to use, supervisors will be better able to identify banks whose risk management and risk levels differ significantly from other banks.
The usual complaint one hears, for example when authorities globally are clamping down on cryptocurrencies, that innovation is being stifled, is not really valid. Undoubtedly, we see a critical role for the fintech ecosystem to act as a force multiplier as we seek to achieve our goals of financial inclusion, digitalisation and customer protection.