Richard Ellis, a senior banker and now Advisor to the Central Bank of Bahrain (CBB) was of the view that ‘risk’ had been tremendously underestimated by the banks in the past. Now, he said, the time has come to find the missing link in risk management and the way banks do business by taking extreme precaution on associated risks in the business.
Ellis, addressing the BAB Meet the Press said the Basel Committee felt the need to bolster the rules minimizing the risks in the banking industry. Basell III regulations, he said, will help to bridge the gaps, if any, in the risk management tools.
The banks, he continued, due to their casual attitude towards risk management failed to understand that how quickly the market can be dried out.
“In the past three to five years the regulatory framework were considered inadequate to cope any upheaval and Basel III have been designed to equip the banking industry with necessary tools to deal with the risk related scenarios. New liquidity requirements, IFSB and AAIOFI are offering whole plethora of requirements to run businesses while observing disclosures, transparency, governance, risk management, ethics and above all independent boards,” he explained.