New US Basel II timetable a major step forward, says Fed's Bies

WASHINGTON, September 30 (Global Risk Regulator) – The new timetable and plans for bringing the Basel II bank safety rules into effect in the US mark an important step forward in implementing the rules, Federal Reserve Board governor Susan Schmidt Bies said today.

Bies said the complex, risk-focused Basel II capital adequacy rules, which are now due to come into effect in the US a year later than originally envisaged, will represent "a much-needed, more risk sensitive capital framework for our nation’s large, complex, internationally-active banks".

She was commenting on the joint statement issued earlier today by the four federal banking supervisory agencies which indicated that the Basel II rules would come into effect in 2009 instead of 2008.

Banking industry analysts said the Fed appears to be putting a positive spin on the news, arguing that US supervisors are recommitted to an implementation plan for Basel II instead of being stalled on the issue.

US banking supervisors expect to issue details of their delayed plans for implementing Basel II bank safety rules in the first quarter of 2006.

The new US start-date will be a year later than that suggested by the Basel Committee on Banking Supervision, the architect of Basel II, for banks using advanced approaches to measuring their credit and operational risks. The Basel Committee timetable has been adopted by many countries, including the 25 member states of the European Union.

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