BVI Financial Services Commission Basel II Preliminary Survey

Summary

This document is a preliminary survey questionnaire issued by the BVI Financial Services Commission's Banking and Fiduciary Services Division to gauge banks' knowledge of and readiness for implementing the Revised Capital Framework (Basel II). It explains the three pillars of Basel II (minimum capital requirements, supervisory review, and market discipline) and asks banks to answer questions about their familiarity with the Standardised and Internal Ratings Based approaches to credit risk, their capital planning, and any implementation roadmaps.

• Bank information: Banks must identify their category (locally owned, subsidiary or branch of a foreign bank, or offshore/international bank), provide contact details, and complete an appendix breaking down Tier 1 and Tier 2 capital as at end of 2006.
• Basel II awareness: Banks must state their familiarity with Basel II, their perception of its impact, and whether they are aware it may be implemented in the BVI.
• Approach selection: Banks must indicate which credit risk approach (Simplified Standardised, Standardised, or Internal Ratings Based) they or their parent/head office would adopt, and answer approach-specific questions on impact studies, staff readiness, and implementation roadmaps.
• General questions: All banks must address expected challenges, anticipated changes in capital levels, and any issues they wish the Commission to address, and have the survey signed by an authorised signatory.

The survey was a one-time historical data-gathering exercise; completed forms were to be sent to the Director of the Banking and Fiduciary Services Division by the stated due date. It does not itself impose ongoing regulatory capital rules, but Appendix I summarizes the substantive Basel II framework (capital categories, risk weighting methods, and the three pillars) for reference.

Key obligations

• Banks were requested to complete the Basel II Preliminary Survey and submit it to the Director of the Banking and Fiduciary Services Division, BVI Financial Services Commission, by the stated due date.
• Banks must complete Appendix II detailing their Tier 1 and Tier 2 capital breakdown as at the end of 2006.
• The completed survey must be signed by an authorised signatory of the bank.

Applies to

locally owned banks, subsidiaries of foreign banks, branches of foreign banks, offshore or international banks

Deadlines

• March 30th, 2007: Due date for receipt of the completed Basel II Preliminary Survey by the BVI Financial Services Commission