The Financial Times has published a letter by SFI Professor Giovanni Barone-Adesi in the April 15th edition of the paper in which he comments that the ‘current debate on the adequacy of Basel II [should pay] more attention to incentives and education rather than to more regulation’.
Barone-Adesi’s comments follow recent statements by Basel II chairman Nout Wellink that banks should adopt more ‘forward looking approaches to assessing, managing and holding adequate capital for risks’.
Echoing Baroni-Adesi’s sentiments was another letter arguing that Wellink's statement reflects a ‘continued obsession with regulatory capital to the exclusion of a focus of what really goes wrong.’
Barone-Adesi calls for an improvement in ‘risk culture’, including better education for banking directors and managers in the complex risk measures proposed by the Basel II directive.
