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GRR is out: US vows to adopt Basel II amid pull-out fears

Susan Schmidt Bies, the US Federal Reserve Governor with prime responsibility for regulatory and supervisory affairs, emphatically insists that America will be adopting the new Basel capital adequacy standard for banks, reports the lead story in the latest issue of Global Risk Regulator newsletter.

Against a background of increasing doubts in Europe over whether the new international standard – the Basel II accord – will ever be applied to US banks, Schmidt Bies tells GRR that the "we intend to adopt Basel II period."

Asked about the implications for the rest of the world if the capital standard failed to win approval in the US, Bies repeated firmly: "I am not even thinking about that because we are going to adopt Basel II".

The second lead story reports that regulators in Japan have strongly denied speculation among some bankers that Japan might, like the US, delay by a year its plans for implementing Basel II.

The third front-page story says Jaime Caruana looks certain to step down next July as chairman of the Basel Committee, the architect of Basel II, after three years in the job. Hot favourite to replace him is the current vice chairman Nick Le Pan, Canada’s Superintendent of Financial Institutions.

Other stories in the December edition:

- Struggle over direction of future EU supervision – EU officials insist supervisory cooperation must be given a chance to work.

- An attempt to build bridges across the great divide – Will the latest guidance of the Basel regulators on treating bank loan losses cut the squabbles between them and the accounting rule-makers?

- Proposed regulations for insurers under fire – As the first Solvency II quantitative impact study gets under way, critics voice a range of concerns at a key CEIOPS meeting.

- Implementing the Basel capital rules – Swiss style – Daniel Sigrist, head of risk management at the Swiss Federal Banking Commission, writes that supervisors in Berne are anxious to minimise implementation burdens, and any changes to the tried and tested system for ensuring Swiss banking soundness.

Newsroom stories include: Trade bodies reject bond price transparency rules; Regulators clarify op risk expected loss rules; Associations form joint MifFID implementation group; EU pledges consolidation and better regulations; Bernanke Backs Basel; Home-Host guide may ease timetable discrepancies; Hedge funds could back code of conduct; Reports on Basel II progress from India, Israel, Bahrain and Albania.