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Basel II compliance estimates too low say banking experts

  • 08/09/2003
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Claims that large European banks could collectively spend e115m over five years to comply with Basel...

Claims that large European banks could collectively spend e115m over five years to comply with Basel II are unrealistically low, according to industry experts.

Technology research group Forrester Research issued the estimate after speaking to 10 leading European banks to find out how much Basel II compliance will cost them.

The research defines Europe’s largest banks as those with total assets of e30bn or more.

Bernard Clarke, spokesman for the Council of Mortgage Lenders (CML), said: “This is at odds with our own estimates of costs of £75m (e109m) to a large lender with a number of lines of business.” The CML’s research was carried out earlier this year.

A spokesman for Bristol & West agreed, saying the estimate was “underestimated” and “unrealistic”.

“For the really big banks it could be nearly as much as this per bank. We estimate that it will cost many hundreds of millions for all the banks together,” she explained.

The estimate from Forrester Research comes in the wake of new rules proposed by the Financial Services Authority to determine how much capital should be held by life insurers.


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