US bankers argue for three-tier Basel regulation

WASHINGTON, January 16 (Global Risk Regulator) – The US would be better off with a three-, rather than two-level system of banking supervision. That’s according to some of the comments received so far on plans to apply a more risk-sensitive version, known as Basel IA, of current bank safety rules to the thousands of the nation’s banks that won’t be adopting the international Basel II capital adequacy regime.

January 18 is the deadline for comment on the Basel IA proposals, which were issued jointly by the four federal banking supervisory agencies in October in the form an advanced notice of proposed rulemaking, or ANPR.

The Basel IA proposals are intended to help offset any competitive disadvantages that might arise for numerous regional and community banks from the planned application of the controversial Basel II rules to only a handful, estimated at 20 or so, of the nation’s largest banks. All these banks must use only the most advanced approaches to measuring their credit and operational risks when Basel II is implemented in the US in 2009.

So far only a few comments on the Basel IA proposals have been posted electronically via the federal rulemaking portal. However, more comments are expected in the two days left before the deadline expires.

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