ABSTRACT
Essentially, the implication of Basel II for you is that, in future, no bank will offer you financial assistance without first establishing your ‘Probability of Default’. To this end it will apply a stringent rating procedure by which to place you in one of several risk categories, and, on that basis, decide whether or to what extent and under which conditions it is prepared to risk funds on you. Basel II only states the general principles to be observed in setting up a rating system. It considers the procedural detail is as a matter to be agreed between each bank and its supervisory authority. As you approach a particular bank for finance, you will not, as a rule, know those specifics. Our search has reliably established one condition: The task of making a business fit for Basel II cannot be approached in terms of compliance with clearly defined rules. Such rules do not exist, not even in the form of general directives.
