The Basel II accord, devised by the Basel Committee on Banking Supervision — the global standard-setter — was designed mainly for G10 countries but most Asian banking regulators are keen to adopt it, starting with basic approaches first.

Hong Kong, Singapore and Australia want to adopt the more advanced methods for measuring risk and deciding how much capital to set aside to cushion against potential shocks soon after the United States and European Union do by 2008 at the earliest.

But other countries in the region such as the Philippines would phase in the application of sophisticated risk-management methods in the next five years.

"So with different applications, I’m not sure it goes in any big way to try and create a level playing field," Loh Boon Chye, head of global markets for Asia at Deutsche Bank, said in a discussion on Basel II at a forex conference in Manila.

"It suggests that it (Basel II) will probably be difficult to implement," Loh said, adding that Asian banking regulators should come up soon with a common timetable for applying Basel II rules to guide markets.

Doubts have been raised on the applicability of Basel II for banks in emerging economies that do not have sophisticated risk management systems in place.

The new rules aim to prevent a financial crisis in one corner of the world spreading across borders by ensuring banks properly cover themselves against business risks.

If the rules work as hoped, they would allow banks to cut borrowing costs for sturdy companies but raise them for risky clients.

"Around Asia, everyone said they will go for Basel II, except China," Nestor Espenilla, Philippine deputy central bank governor, told reporters on the sidelines of the ACI World Congress.

Eli Remolona, chief economist for Asia and the Pacific at the Bank for International Settlements, said China plans to adopt a "Basel 1-1/2" as the world’s fourth-largest economy wants to apply simpler Basel I plus some Basel II rules.

In the Philippines, the central bank expects to release new Basel II-related guidelines by June 30 to allow banks enough time to upgrade their risk management systems before actual implementation sometime next year.

"I don’t think any bank has an immediate plan to go to more sophisticated methodologies," Espenilla said.