The article examines how Basel II regulations impact bank business models in ASEAN countries. Researchers used a difference-in-differences approach to analyze the effects on income, funding, and asset diversification. The study found that Basel II mainly affects income diversification, prompting banks to diversify income sources to avoid holding more capital. However, there is no evidence of impact on funding and asset diversification. The findings suggest that banks in ASEAN countries face challenges in diversifying funding and assets due to market structure and reliance on customer deposits. The implementation of Basel II encourages banks to engage in non-interest income activities like trading and derivatives, which financial authorities should monitor carefully.