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QIS5 test raises no major problems for Basel II, Caruana says

BARCELONA, Spain – May 16 (Global Risk Regulator) – Recent international testing of the Basel II bank safety rules has shown up nothing to affect the aims of the Basel II framework, or anything that can’t be resolved during implementation of the rules, the world’s top banking regulator said today.

Basel Committee on Banking Supervision chairman Jaime Caruana noted the aim of the complex and risk-focused Basel II bank capital regime is to maintain the overall level of capital available in the global banking to absorb shock losses, while enabling individual banks to align their capital more accurately to the risks they face. Many countries plan to start bringing the rules into effect from the beginning of next year.

The results of the recently completed test, known as the fifth Basel II quantitative impact study, or QIS5, will be discussed next week by the Basel Committee, the body of top banking supervisors from North America, Europe and Japan that devised Basel II, at the Committee’s regular quarterly meeting, which will take place in Berlin.

The Committee hopes to say more about the results of QIS5, which involved some 300 banks from around 30 countries, after the Berlin meeting, Caruana told a Basel II conference in Barcelona, organised by GARP, the Global Association of Risk Professionals.