BIS Review 83/2005  1  The development of an industry competency framework seeks to elevate the level of professionalism and competence in the banking industry through appropriate training and certification programmes. For banking institutions, the competency framework will serve as a source of reference and impetus in sharpening competencies of staff and enhancing organisational capabilities to meet future challenges. The framework could also provide a benchmark for performance measurement and recognition for skills improvement. The competency framework will provide the foundation to guide IBBM in designing and offering relevant management and technical programmes to meet the current and future needs of the banking industry. In addition, the framework would assist academic institutions in aligning their curriculum to meet the industry's needs and to ensure a steady supply of graduates in new growth areas. Competency standards set for certification programmes could also serve as a basis for evaluating and accrediting training providers to ensure the provision of top quality training. For the banking workforce, the framework provides a platform for self-assessment to be aware of their competency gaps, and to engage in continuous learning so as to further their careers and keep in tandem with the new demands. The quality of human capital will increasingly become the cutting edge of competitiveness. Having competent staff to deliver high quality products and services is critical to building customer confidence and goodwill, driving customer satisfaction, enhancing reputation, and ultimately realising your corporate vision and strategic goals.

Overview of assessment outcomes  Table 1  Assessed member  Publication date of  Number of regulatory changes,  Overall assessment  jurisdiction  assessment  amendments, and clarifications  grade  made by a member jurisdiction during the assessment Japan  October 2012  5  Compliant  Singapore  March 2013  15  Compliant  Switzerland  June 2013  22  Compliant  China  September 2013  90  Compliant  Comparability of bank capital ratios Over time, the consistent national implementation of Basel III standards will help ensure greater “truth in advertising” when comparing bank capital ratios. It is important that, when a bank publishes what purports to be a Basel III capital ratio, investors and counterparties can be reasonably sure that the ratio has been consistently calculated and that, if there are differences, those differences are transparent and some measure of their materiality is available. But there is more to bank capital calculation than just following national regulations. The current framework makes use of internal models – these were introduced in 1996 for market risk, and in 2006 for credit and operational risk. The rationale was clear: to provide incentives for improved risk measurement, and reduce arbitrage via greater risk sensitivity. The Basel I framework, established in 1988, had grown outdated and was increasingly subject to arbitrage. Given its limited risk sensitivity, it provided banks with incentives to accumulate risk, as the build-up of many risks would not be visible in banks’ capital ratios.