Cayman to implement Basel II in 2010-2012
It has been discussed previously that the Cayman Islands Monetary Authority (CIMA) has launched a study aimed to choose the most appropriate options for implementing updated international standards aimed at determining banks’ capital adequacy.
Now, the Board of CIMA has approved the implementation of the new Basel II framework in Cayman between 2010 and 2012.
On September 24, 2007, CIMA informed that the implementation of Basel II will follow a preparation process. The preparation process will include such important processes as policy development, new reporting requirements and consultations with the banking industry in the Cayman Islands. The search for a Basel II Implementation Project Manager has already begun the preparation process.
Initially, Cayman incorporated banks will be required to implement the standardized approaches under Pillar 1 by the end of 2010, and Pillars 2 and 3 will be implemented between 2010 and 2012.
According to CIMA, the standardized approaches under Basel II will facilitate the banking industry’s risk profile and business mix as well as enhance its risk measurement and management practices.
It should be noted that Cayman’s banking industry currently includes 280 banks from more than 40 countries. About 100 of them will be directly influenced by the implementation of the Basel II framework.