Cayman Islands Announces Staged Basel II Implementation

by Amanda Banks, for LawAndTax-News.com, London

27 July 2007

The Cayman Islands Monetary Authority (CIMA) announced following its recent Board of Directors meeting that it will undertake a staged implementation of the Basel II Framework for banks licensed in the Cayman Islands.

This decision was made following a detailed impact study conducted with PricewaterhouseCoopers which included consultation with various stakeholders of the Cayman banking industry. The implementation will be staged over a number of years, in collaboration with the industry.

The Basel II Framework was developed by the Basel Committee on Banking Supervision, and is a new global supervisory framework for assessing the capital adequacy of international banks. Most G-10 countries and many other banking supervisors, including those of major international financial services centres, plan to implement the framework over the next few years.

CIMA's Acting Managing Director, Patrick Bodden, revealed that the Authority had assessed the Basel II Framework on its merits, and considered its implementation as beneficial for the jurisdiction: "The implementation of the framework is a vital part of the Cayman Islands' continued commitment both to modern risk based supervision and to meeting internationally accepted and applied supervisory standards. Having the framework in place will enhance our standing and competitiveness as a financial services centre."

CIMA will shortly make available a summary of the impact study and will, in the next few months, issue a high level road map that sets out the proposed timetable (including consultations) and implementation options.

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