Commencement of Second Phase in PMA Project for Implementation of Basel (II)/(III) Resolutions

Dr. Jihad Al Wazir announced that PMA has officially initiated the second phase of the project for the implementation of Basel (II)/(III) resolutions. The project comes as part of PMA diligent efforts to stay up-to-date with the best international practices of banking supervision and ongoing developments in banking supervision standards; most compelling standards being those released by the Basel Committee on Banking Supervision.

The Basel Committee on Banking Supervision, located at the Bank for International Settlements in Basel, Switzerland, provides a forum for bank supervisors of member states and manifests the international cooperation on various banking supervisory matters. Its objective is to enhance the quality of banking supervision by central banks and monetary authorities and coordinate supervisory efforts with the purpose of achieving financial stability and improving awareness of key supervisory issues worldwide. The Committee issues, on regular basis, standards and guidelines concerning various supervisory aspects. Key standards include standards on bank capital adequacy and the basic principles for effective banking supervision.

Banks operating in Palestine apply the requirements of Basel (I) concerning capital adequacy. PMA has adopted the application of the resolutions of Basel (II) on a number of supervisory aspects in relation to governance, risk management and basic principles of effective banking supervision, which is clearly reflected in legislation issued by PMA.

As a result of ongoing developments in the Basel requirements on one hand, and the development and expansion of activities and services of the Palestinian banking sector on the other, the PMA started during 2013 the implementation of Basel (II) resolutions and its revisions to the capital adequacy framework through a comprehensive plan that takes into consideration the peculiarity of the Palestinian situation while staying up-to-date with the best international practices. 

By implementing Basel II resolutions and its revisions, the PMA aims at improving and enhancing governance and risk management in the Palestinian banking system in a manner contributing to the reinforcement of financial solvency, the enhancement of the ability to manage risks that accompany the banking business and the maintenance of a stable and sound banking system as well as the protection of customer funds. The project is expected to conclude during the next year of 2015.