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US regulators keen on Basel II

US Federal Reserve chairman Ben Bernanke has urged financial institutions to press on with Basel II reforms, arguing that the industry stands to reap substantial benefits from the changes.

Speaking at a banking conference in Chicago, Mr Bernanke said that the continual evolution of banking practices made the introduction of Basel II inevitable.

"No immediate crisis requires us to move toward Basel II, but the gradual evolution of market practice and the emergence of very large and increasingly complex banking organisations operating on a global scale require that we make significant changes in the way we assess capital adequacy at these organisations," he said.

"Indeed, waiting for a crisis to force change would be foolish; by moving forward now, we have the luxury of being deliberate in the development and introduction of a system that promises significant benefits."

Regulators in the US have already issued draft rules on the implementation of the Basel II accord to the nation's banks.

The accord requires all banks to guard against possible market crashes by ensuring adequate capital is held in reserve.

Coming after years of discussion by the world's financial industries, Basel II is set to be implemented globally between 2008 and 2011.