The consultation paper, published last week, outlines the UK implementation of the Capital Requirements Directive, which will introduce the requirements of the Basel 2 code on risk management.
Basel 2, due to come into force in 2007, requires firms to better assess and manage the risks they face. It will necessitate wide-ranging changes to IT systems across subsidiaries worldwide.
The paper refers to a 2004 FSA survey in which financial firms said they needed more work in areas including IT systems and "database integrity" to comply with Basel 2 rules.
A second consultation paper later this year will outline the costs and benefits banks face in compliance with Basel 2.
Bank invests heavily in compliance >>