A Review of the Review

In 1997 a process started to review the 1988 Basel I Accord, which ultimately led to the Basel II Accord of June 2004. In this paper Sir Howard Davies, Director of the London School of Economics and Former Chairman of the Financial Services Authority, provides an analysis of this review process. Several issues related to the complexity and implementability of the Accord are discussed. Although the author thinks that Basel II has many appealing aspects (such as the three‐pillar framework), he argues that the outcome is very complicated, it took a very long time, and needs to be adapted in ways not originally envisaged. He calls for a "Review of the Review" to see what lessons can be learnt from the review process which might be helpful for the future.