In the paper the authors tried to estimate the implications and consequences of 'Basel II' for Slovenian banking sector just before its implementation. Their survey indicates that a lot of the 'Basel II' impacts are actually unclear to the banks and even to the regulator. The impact on individual institutions will be driven by their level of sophistication in risk management. Banks claim that implementation of the International Rating Based (IRB) approach requires large initial investments in risk management technologies from the cost perspective as well from the knowledge and data gathering. This could deter small banks from choosing the IRB approach.
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