Rufus Folorunso Akinyooye - St Clements University

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Table 4.3.3 Response on the issue of guideline of risk-based supervision being
adopted by the CBN
Table 4.3.4 Response on the issue of justifiable preference on the adopted risk
based supervision.
Table 4.3.5 Response on the level of compliance with externally assisted assessment
Table 4.3.6 Response on how soon would Nigeria be compliant with the Basel 2 Accord
Table 4.4 Analysis of questions on structural and institutional factors influencing the
C H A P T E R 1
A) Introduction
implementation of Basel 2 accord
The Basel 2 Accord is the framework laid in 1999 by the Central Banks of G10 countries to
regulate the management of risks in large internationally active banks in their domain and in
the Organization for Economic Cooperation and Development (OECD) member countries. The
focus is on the provision of risk-based regulatory capital for all the exposures of these systemic
banks to enable them withstand any threat to their solvency. The first phase of Loss Data
Gathering has been operative for the past three years and is due for take-off in December this
year 2006 in G10 member countries.
The Accord is being named after the city of Basel Switzerland, which is home to the Basel
Committee on Banking Supervision (BCBS). The Committee comprises representatives of the
Central Banks and Supervisory authorities of the Group of Ten (G10) countries of Belgium,
Canada, France, Germany, Italy, Japan, Netherlands, Sweden, Switzerland, United Kingdom,
United States, and Luxembourg. The Bank for International Settlement (BIS) also based in
Basel Switzerland formed it.
According to the Encyclopaedia Britannica, the Bank for International Settlement itself was
formed in Basel Switzerland in 1930 as the agency to handle the payment of reparations by
Germany after the First World War and as an institution for cooperation among the central
banks of various countries especially those that were later to become known as the G10
countries. It has been performing the latter function since and the Basel Accords are examples
of it.