As international financial markets expand, global concerns over the soundness of banking practices are driving stringent new requirements for bank-level management, regulatory control, and market disclosure. In particular, the new Basel Capital Accord (Basel II) mandates a more risk-sensitive framework – increasing both the extent of risk management and the level of disclosure.

The SAP solution for Basel II builds on the proven capabilities of the SAP for Banking solution portfolio – to help you meet Basel II requirements for calculating risk exposure and capital, as well as implementing new supervisory review and disclosure processes.

Addressing credit risk as the main challenge of the new regulation, the solution for Basel II integrates internal and external risk management on a single platform, and complements our existing solutions for the management of market risk, interest risk, and liquidity risk. The solution supports all Basel II-specified methods for credit risk calculation – from the standardized approach to the advanced internal ratings-based (IRB) approach.

Furthermore, the solution's capabilities for managing and analyzing assets, liability, and market risk address new requirements for interest-rate risk management in the banking book.

The SAP solution for Basel II can be an integral part of a larger credit risk platform, which includes limit and credit portfolio management for regulatory and economic capital. Incorporating regulatory requirements and your bank's own internal risk views, our credit risk platform can provide a sound basis for managing all areas of credit risk.