Basel II

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Legislative summary
Basel II is a round of deliberations by central bankers from around the world, under the auspices of the Basel Committee on Banking Supervision (BCBS) in Basel, Switzerland, aimed at producing uniformity in the way banks and banking regulators approach risk management across national borders. The BCBS is the international rule-making body for banking compliance. In 2004, central bank governors and the heads of bank supervisory authorities in the Group of Ten (G10) countries endorsed the publication of “International Convergence of Capital Measurement and Capital Standards: a Revised Framework,” the new capital adequacy framework commonly known as Basel II. Basel II essentially requires banks to increase their capital reserves or demonstrate that they can systematically and effectively control their credit and operational risk. The framework defines operational risk as “the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events” and highlights hacking and information theft through inadequate systems security as loss events. While banks around the world are experts at managing risk by virtue of operating in global financial markets, they are relatively new at understanding and controlling the risks inherent with operating online banking systems and keeping customer data secure.

HP Application Security Center capabilities

• Verify that web application access to sensitive information is controlled by authentication and authorization
• Check for encrypted data communication
• Validate that web application inputs are properly validated and not vulnerable to command injection or cross-site scripting attacks
• Assess your web applications for vulnerabilities that may result in the disclosure of sensitive or private information
• Check for vulnerability to denial of service attacks
• Get detailed security assessment reports categorized by Base II sections

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