Newsletter Sep 2007: Pre-conditions for Kenya\'s Basel II adoption spelt out

NAIROBI – The Central Bank of Kenya is undertaking a number of initiatives that should eventually allow the country to adopt the new, Basel II capital standard for banks, which is starting to be introduced around the world this year. Professor Njuguna Ndung’u, governor of the Central Bank of Kenya (CBK), said in late August that among the most critical prerequisites for his country’s adoption of Basel II was the shift to Risk-Based Supervision (RBS), which began there in 2004. RBS focuses on “assessing the adequacy of banks’ risk management frameworks in identifying, measuring and mitigating inherent business risks,” he explained in a speech at the opening of the 7th East African banking School.