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Banks in revolt against "regulatory exuberance"
Bankers face unprecedented volume of regulation. Proposal to establish wise men's group to provide a new way forward By Melvyn Westlake
Concern over "potential" overlap in new EU laws
Operational risk managers fear key directives may clash. EU securities and banking bodies make hurried cross-checks
Out of the loop, but up with the game
Australia is not a member of the Basel club. But it is a leader on Basel II in Asia-Pacific. Meeting its 2008 implementation deadline will still be a tough task . David Keefe reports
A little national discretion
Australian banking supervisors are using national discretion to propose that banks and other deposit-taking firms hold more capital than suggested by the Basel II capital rules to guard against `other retail' exposures.
Business continuity now risk management requirement
Directors and senior management of an Australian bank or general insurer must regard business continuity risks and controls as part of the firm's overall risk management report to regulators.
A very Indian approach to new Basel capital rules
Plans for a speedy adoption of Basel II by Indian banks has caused some surprise. But its implementation will be cautious
Pakistan decides to adopt new Basel capital rules
Pakistan has decided to adopt the new Basel capital accord, the State Bank of Pakistan (SBP), the country's central bank, announced at the end of March.
Regulators issue key trading book proposals
BASEL - Banks and investment firms seem likely to give a mixed reception to new regulatory proposals dealing with their trading book risks, published on April 11, as part of the ambitious rewrite of the capital adequacy rules for banks around the world.
Common reporting framework developed for EU
LONDON - Europe's banking regulators have developed a common financial reporting framework for banks designed to be consistent with new international accounting rules.
EU supervisors to disclose how they apply new rules
LONDON - By the end of 2006, supervisors across the European Union will have to disclose how they are applying and policing the new capital adequacy rules for banks, according to proposed guidelines published in late March.
Solvency II first draft expected in October
BRUSSELS - The revised `roadmap' for Europe's risk-based Solvency II project for making insurers safer envisages having a first draft, containing major parts of the Solvency II framework directive, ready for discussion by October.
Change sought to US credit exposure classification
WASHINGTON - Four federal US bank regulatory agencies announced in March that they are seeking comment on proposed changes to the supervisory framework for classifying commercial credit exposures.
Much US work to be done on capital rules
WASHINGTON - US federal banking regulators warned of much work to be done as they worked towards the mid-year target for releasing US proposals for the implementation of the Basel II global capital rules.
EU reinsurance law set for summer adoption
BRUSSELS - The EU's Reinsurance Directive now appears to have gained sufficient support both in the European Parliament and among governments in Council, to be adopted by the summer, allowing reinsurers to treat the 25-country bloc as a single market, and creating a harmonised system of supervision for the industry.
QIS 5 details confirmed
BASEL, Switzerland - Global banking regulators confirmed in late March their plans to undertake between October and December this year a fifth quantitative impact study -QIS 5 - into the effects of the complex Basel II upgrade of international capital rules for bank safety.
Key risk indicator service
PHILADELPHIA, Pennsylvania - The Risk Management Association (RMA) and RiskBusiness have entered into an agreement with enterprise risk management specialist Algorithmics to develop a joint external loss event/key risk indicator service.
McCreevy puts credit rating agencies on "watch"
DUBLIN - The importance of the role of credit agencies is enhanced by the provisions of the international Basel II rules for improving bank safety, Europe's top financial regulator said in early April.
Making the best of regulatory overload
Three major, over-lapping sets of regulations will soon be hitting banks and investment firms. David Millar takes a look at the similarities between Basel II, Sarbanes-Oxley and MiFID
Basel II model cannot be cloned for insurers
Europe's Solvency II insurance regime is modelled on the new capital framework for banks, but is this causing confusion?
Matters of judgment
Australia's approach to insurance regulation has won admirers. Europe is watching closely. David Keefe meets Apra's Tom Karp
Recent Basel II news: QIS 5 plans confirmed; US central banker says much work to be done
April 3 - Recent statements on the planned Basel II rules for bolstering the solvency of the world's banking system include the following:
Greenspan says Basel II will make US banks stronger
WASHINGTON, April 5 - Implementing the new Basel II global banking rules would make US banks stronger and safer, and were unlikely to harm their competitiveness, according to US Federal Reserve Board Chairman Alan Greenspan.
European supervisors develop common reporting framework
LONDON, April 8 - Europe's banking regulators have developed a common financial reporting framework for banks designed to be consistent with new international accounting rules.
Regulators issue key proposals to manage banks' trading book risks
Banks and investment firms seem likely to give a mixed reception to new regulatory proposals dealing with their trading book risks, published on Monday as part of the ambitious rewrite of the capital adequacy rules for banks around the world.
April 12 - This is a round-up of some recent news on the implementation of the Basel II international bank capital rules in the US and Australia:
US delays issuing Basel II implementation plans - need for further study
WASHINGTON, April 30 - US federal regulators are delaying the publication of proposals for mplementing the complex Basel II bank capital rules because their impact on the US banking system needs further study.
Basel regulators to launch major new capital project
EU Commission moves quickly to prepare for negotiations over definition of bank capital. Controversy likely in US and Europe By Melvyn Westlake
EU Commission will look at how impediments to consolidated supervision can be removed.
Bankers want review clause in CRD
Dugan tapped to head OCC
President George W. Bush tapped lawyer and former Treasury Department official John Dugan to be Comptroller of the Currency and oversee regulation of some of the largest US banks, the White House said in late February.
The Solvency II insurance project can't wait for the accounting rule-makers, say regulators.
And they are optimistic about 2010 as a start date, despite the doubts. By David Keefe
Life after death for Thai banks as Basel II comes into sight
In the late 1990s Thailand's banks faced melt-down. Thanks to growth, and firm action, they are earning their way back to health. New Basel capital regime to be implemented at end-2008
US regulators warn that Basel II still faces hurdles
WASHINGTON - The big guns of the US federal banking regulators were out in early March, warning of tight and challenging deadlines and urging banks to expedite their plans for implementing the Basel II capital adequacy rules.
Op risk capital charge will not hurt specialist banks
WASHINGTON - Large US banks chiefly involved in specialised activities, such as securities custody, payment processing and asset management, will not be badly disadvantaged by the proposed operational risk capital charge, despite claims to the contrary.
Critics fire conterblast at damaging op risk impact
WASHINGTON - In a counterblast to regulators who suggest that a capital charge for operational risk will have no competitive impact, Financial Guardian Group (FGG), a Washington-based advocacy firm, published in February a study arguing that the proposed charge will actually have serious, adverse implications.
Australia, Singapore lead Asia-Pac on capital rules
MELBOURNE - Australia and Singapore are the Asia-Pacific countries where banks are making best progress towards the implementation of the new, risk-based Basel capital accord.
New accord will cut Indian banks' capital ratios
MUMBAI - Indian banks are likely to experience some overall reduction in capital ratios when the new, risk-based Basel capital accord is implemented there from March 31, 2007.
Peru banks need many years to reach Basel II
LIMA - It will take a few more years for Peruvian banks to move fully on to the new, risk-based Basel capital accord than it will for banks in the larger and more sophisticated markets of Latin America, such as Chile and Mexico.
Caruana pleased with trading book progress
BARCELONA - The world's top banking regulator is highly satisfied with the progress of work on the treatment of double default and trading book exposures under the complex Basel II upgrade of international bank safety rules.
Supervisors home in on finite risk insurance
BASEL, Switzerland - The international body for insurance regulators plans to issue a draft consultation paper by the end of this year on the controversial practice of finite risk reinsurance.
Zambia sees international accounting rules as key
LUSAKA - New international accounting rules are expected to play a critical role in the risk-based supervision of financial firms in Zambia, the head of the country's central bank said in mid-February.
New Zealand will allow advanced approaches
WELLINGTON - New Zealand regulators bowed perhaps to the inevitable as Global Risk Regulator went to press and said they would allow advanced approaches to credit and operational risk measurement in the implementation of Basel II in New Zealand.
Credit risk transfer firms must improve skills
BASEL, Switzerland - Financial firms taking part in the credit risk transfer (CRT) market need to continue developing their risk management skills, while their supervisors need improve their understanding of the issues, says a report issued in March by the Joint Forum of banking, insurance and securities market regulators.
A deal at last - "fair value" formula wins backing
Accounting rule-makers remain cautious, but it looks like a done deal on the fair value option. Hopes rise for a cure to Europe's problems with IAS 39. By David Keefe
EU v. rest of the world
Having a say in what the International Accounting Standards Board does has become a hot political issue. Here's a review of the comments offered by regulators
Still under the gun, despite SOX delay
Firms mustn't be complacent about the delay in applying SOX 404 to foreign companies, says guest contributor Bruce McCuaig. There are sound reasons for pressing ahead at full speed
Majority of British banks support EU capital law
Key survey shows benefits of capital directive set to outweigh costs. Many fears misplaced, says survey author Mark Tilden
Insurers see workable solution to fair value option issue
LONDON, March 2 - Europe's insurers are softening their opposition to limitations on the use of the fair value option in new international accounting rules in the light of the latest attempt to resolve the wrangle over the option.
Hong Kong plans final Basel II rules by end of year
HONG KONG, March 4 - Hong Kong regulators plan to complete by the end of this year the drafting of detailed rules for implementing the international Basel II bank safety accord.
Regulator says 2010 date not unreasonable for Europe's Solvency II insurer rules
LONDON, March 9 - A 2010 date for the coming into effect of the Solvency II regime for making Europe's insurance industry safer is not an unreasonable target, a senior European Union regulator said today.
UK questions feasibility of Europe's Basel II start-date
LONDON, March 11 - UK regulators, who favour a single `big-bang' 2008 start-date, are questioning the practicality of the planned January 1, 2007 date for bringing the Basel II bank safety rules into effect in Europe, given possible delays in the law-making process.
US plans to offset Basel II effects on small banks, says Greenspan
SAN ANTONIO, TEXAS, March 11 - US banking supervisors will propose this summer some options for simple revisions to current capital rules where this would mitigate any unintended disadvantages for small and regional US banks created by the Basel II bank safety pact, US Federal Reserve Board chairman Alan Greenspan said today.
US regulators warn on Basel II challenges, reiterate no `done deal'
WASHINGTON, March 14 - Top US banking regulators today underlined the timetable challenges facing the US in implementing the Basel II bank safety rules, urged banks to expedite their plans and warned of obstacles in the way.
Caruana pleased with progress of Basel II double default/trading book issues
BARCELONA, March 16 - The world's top banking regulator is highly satisfied with the progress of work on the treatment of double default and trading book exposures under the complex Basel II upgrade of international bank safety rules.
EU supervisors to disclose how they apply new bank capital rules
By the end of 2006, supervisors across the European Union will have to disclose how they are applying and policing the new capital adequacy rules for banks, according to proposed guidelines published on Wednesday.
New worldwide study to test Basel II impact
Recalibration decisions brought forward at US request. Race to include results of trading book review in coordinated QIS5 plan By Melvyn Westlake
Breakthrough seen in key accounting wrangle
Latest paper closes gap between banking regulators and accounting rule-makers on the vexed fair value option problem. By David Keefe
Doubts over UK regulator's resources to test models
Bankers are asking if the Financial Services Authority has the capacity to meet Basel II demands over validation
EU will review barriers to one-stop bank supervision
Charlie McCreevy, the EU commissioner for internal markets, has indicated to European bankers that his staff will work over the coming five years to remove barriers to the consolidated supervision of banks.
Cautious Malaysia takes a longer road to Basel II
A 2010 start date for banks adopting a more sophisticated capital model gives time for them, and supervisors, to get it right
Rating agencies pitch the case against regulation
US Senate Banking Committee investigates rating agencies role, while EU consults on the case for regulation
EU supervisors issue CP on common reporting
LONDON - A plan to provide a common framework for European banks and investment firms to report their solvency ratios was published in late January by the Committee of European Banking Supervisors (CEBS).
Indonesia sees banking best practices in place by 2010
JAKARTA - Indonesia can look forward to a banking system that by end-2010 will be fully capable of applying best practices in general and most importantly, the Basel II capital rules for improving bank safety, the country's central bank governor said in January.
HSBC sees no capital savings from Basel II
HONG KONG - The Basel II upgrade of bank capital adequacy rules is unlikely to result in capital savings for the UK banking group HSBC on a group-wide basis, a top HSBC executive said in early February.
Asia should beware of wholesale accord adoption
HONG KONG - Most Asian bank supervisors are likely to implement the new risk-sensitive capital accord - Basel II - as a key part of their supervisory regimes.
Timetable forces disclosure of US Basel II thinking
WASHINGTON - The challenging US schedule for implementing the international Basel II bank safety rules has prompted US banking supervisors to give early disclosure of their current thinking on the qualifications needed for the advanced risk measurement approaches.
Rise in regulation is seen as greatest risk for banks
LONDON - The remorseless rise of regulation has become the greatest risk facing the banking sector, according to the latest "Banana Skins" survey conducted by the Centre for the Study of Financial Innovation (CSFI), a London think tank.
Markets may force Basel II timetable, says Caruana
HONG KONG - Markets may set a more demanding timetable for banks and countries to adopt the Basel II upgrade of international bank safety rules than the "soft transition" envisaged by supervisors and institutions, the world's top banking supervisor said in early February.
Accounting rule-makers await European critics
LONDON - Global accounting rule-makers were waiting, as GRR went to press, formal details from Europe's top financial regulator of demands he made in February for greater democratic governance and political accountability of rule-setters.
Regulators issue internal-ratings validation studies
BASEL, Switzerland - Global banking regulators issued in February a collection of studies by their experts on the validation of advanced approaches to measuring credit risk under the Basel II upgrade of bank safety rules.
Roadmap for world insurer solvency rules expected
BASEL, Switzerland - The world's insurance regulators plan to issue a roadmap later this year for the completion of a common structure and common standards for assessing insurer solvency, the International Association of Insurance Supervisors (IAIS) said in February.
Europe may go it alone
Ever-receding timetable for an international standard means EU regulators will have to develop their own approach to valuing insurance contracts. David Keefe reports
Shock news - SOX is working
The Sarbanes-Oxley rules are improving the quality of financial disclosure, despite criticisms, says Tim Leech.
SOX-style regime comes to Canada
New corporate governance proposals will help bring convergence with US Sarbanes-Oxley rules, says Bruce McCuaig
Markets may force Basel II timetable, says Caruana; HSBC sees no capital saving from accord
HONG KONG, February 4 - Markets may set a more demanding timetable for banks and countries to adopt the Basel II upgrade of international bank safety rules than the "soft transition" envisaged by supervisors and institutions, the world's top banking supervisor said today.
Paper seeks to allay regulator fears over fair value option
LONDON, February 4 - Global accounting rule-makers are thought likely to try to allay banking regulator fears about abuse of the so-called fair value option in new accounting rules by proposing that firms using the option give clear reasons for doing so.
Accounting paper confirms efforts to calm fair value option fears
LONDON, February 11 - Global accounting rule-makers have revised their latest proposals on the so-called fair value option to try to meet banking supervisor fears that the option could be abused by weak banks.
Insurance accounting concerns seen in Solvency II advice call
BRUSSELS, February 23 - Concern that global accounting rule-makers won't be able to agree a rule for valuing insurance contracts on time, was reflected today in a call for advice by the European Commission on aspects of the risk-focused Solvency II project for making Europe's insurance industry safer.
Agencies seek pragmatic solutions to op risk split
Practical issues loom large as Basel II implementation takes centre stage. Impact study and benchmarking might hold answers By Melvyn Westlake
Europe's Solvency II delay not seen as big setback
Draft law for insurers won't be ready until next year. But many regulators say need to bolster insurer solvency remains urgent. David Keefe reports
New rating agency code may avert tougher regulations
Regulatory treatment of credit rating agencies is being mulled in the US and EU. Agencies hope any onerous regime will be averted, but Basel II requires a recognition process By Melvyn Westlake
South Africa gives Basel II high priority
Implementing the Basel II capital rules for bank safety will be a high priority area for South Africa's banking supervisors over coming years, the head of South Africa's central bank said in December.
Insurance regulators propose prudential filters
Banking regulators remain concerned that what's crucially lacking in the latest attempts to allay their fears about possible abuse of the so-called fair value option in new international accounting rules is a strong reference to risk management.
New Fed ratings to score bank groups' risk systems
Federal Reserve's revamped internal rating system now includes risk management factors. Rating rises and falls may follow
Swiss central banker warns on liquidity risk
Central banks and financial supervisors in the Group of 10 (G-10) leading economies should increasingly focus attention on minimising the liquidity risks faced by banks, a top Swiss central banker said in December.
Many Asia-Pacific banks lag on capital accord
HONG KONG - The majority of banks in the Asia-Pacific region are only at the earliest stages in their planned implementation of the new Basel capital accord, or have not yet even started.
Basel regulators make QIS workbooks available
BASEL - Global banking regulators have suggested that templates of workbooks and instructions used in previous impact studies of the Basel II bank safety rules could be used in separate national studies now underway or planned.
China's banks get new risk management rules
BEIJING - China's bank regulator has started the year by issuing two new risk management and internal control regulations aimed at strengthening the defences of the - in many cases - bad-debt-encumbered commercial banks, and introducing international best practices into them.
Korean banks will apply accord from end-2007
SEOUL - South Korea's 19 commercial banks will all be required to comply with the new Basel capital accord from the end of 2007, irrespective of which option they choose to measure their risk capital under the international agreement to bolster bank safety.
Fewer banks planning for higher risk measure
NEW YORK - There are some early signs that fewer banks around the world will adopt the most sophisticated approaches to measuring their regulatory risk capital under the new Basel capital accord than originally seemed likely.
Papers on double default, trading book due in April
BRUSSELS - Global banking regulators expect to issue discussion papers on contentious double default and trading book issues in early April, and to begin a Basel II recalibration exercise earlier than anticipated, the world's top banking regulator said in January.
Challenges facing Basel II, says US central banker
PHILADELPHIA - Difficult challenges lie ahead in implementing the Basel II upgrade of international rules for bank safety, a top US central banker said in early January.
European regulators plan raft of consultation papers
LONDON - European banking supervisors plan to issue a number of public consultation papers this year, most of them related to the implementation in the European Union of the Basel II upgrade of international capital rules for bank safety.
ECB worries about rising credit risk
FRANKFURT-AM-MAIN, Germany - Signs of increased risk-taking by European banks are evident with their increased holding of bonds and other debt, the European Central Bank (ECB) said in December.
Denmark issues warning on bank capital levels
COPENHAGEN - Denmark's central bank sent a polite warning to the country's banks in December not to get careless about their capital levels with the introduction of new accounting rules and the coming of the Basel II capital regime.
Israeli banks make slow progress to new accord
Banks in the Jewish state say they are adequately capitalised. Critics say otherwise. Basel II should reveal the truth
Fischer slated for top Israeli central bank job
Stanley Fischer, the distinguished American economist who's been nominated to head Israel's central bank, believes that the Basel II bank safety rules could materially reduce the incentive for larger international banks to expand operations in emerging market economies.
Giving receivables their due credit
Sarbanes-Oxley is putting the spotlight on a neglected area of the balance sheet - receivables. Competitive advantages can flow from paying attention, argue Peter Buckle and Tim Wildman
Helping bankers with special needs
Data scarcity makes special asset classes a particular challenge in calibrating internal ratings systems. Well-managed data pooling helps fill this gap, argues guest contributor Jane Zennario
Time constraints induce disclosure of US Basel II thinking
WASHINGTON, January 27 - The challenging US schedule for implementing the international Basel II bank safety rules has prompted US banking supervisors to give early disclosure of their current thinking on the qualifications needed for the advanced risk measurement approaches.
Challenges ahead for Basel II, says US central banker
PHILADELPHIA, Pennsylvania, January 9 - Difficult challenges lie ahead in implementing the Basel II upgrade of international rules for bank safety, according to a top US central banker.
Double default and trading book papers in April, Basel II calibration test in autumn, says Caruana
BRUSSELS, January 19 - Global banking regulators expect to issue discussion papers on contentious double default and trading book issues in early April, and to begin a Basel II recalibration exercise earlier than anticipated, according to the world's top banking regulator.
Draft Solvency II insurance regulation postponed a year
BRUSSELS, January 12 - European regulators have postponed for a year the planned appearance of a draft framework law for implementing the risk-focused Solvency II rules for improving the safety of Europe's insurance industry.
EU banks dig in for fight over supervisory burden
Agreement on lead supervisors for new capital regime hailed as "revolutionary." Banks fear it still leaves Europe at disadvantage By Melvyn Westlake
US regulators split over op risk implementation
As the US debate over Basel II reignites, agencies wrestle with a key remaining issue. A tough timetable could be blown off course By David Keefe
Regulators lukewarm about latest fair value option idea
A new proposal for guarding against abuse of the fair value option seems not to have impressed regulators. Accountants' paper moots moving to principles-based approach
Basel regulators advise on accounting exclusions
Global banking regulators are asking national supervisors to consider excluding unrealised gains and losses on loans designated as available-for-sale from the definition of Tier 1 and Tier 2 capital.
Setting out the case for US regulatory consolidation
A report by the Government Accountability Office offers four options to streamline the fragmented US regulatory structure By Melvyn Westlake
French banks enjoy head start in move to Basel II
Reforms in 1990s created sophisticated banks. Most will adopt advanced risk measurement. Capital cuts likely for some.
A middle way to Basel II for emerging economies
Latin America's readiness for Basel II is doubted. But some advocate a centralised ratings-based approach to credit risk as the best way forward for many emerging economies. By David Keefe
Hedge Funds resign themselves to SEC regulation
NEW YORK - Much of the hedge fund industry in the US seems resigned to being regulated by the Securities and Exchange Commission (SEC), following the majority vote among commissioners in late October to push ahead with mandatory registration of fund advisors, and the publication of the final rule in early December.
Israel issuing op risk plans
TEL-AVIV - Israeli banking supervisors expect to issue in a few months' time draft guidelines to banks on implementing the operational risk aspects of Basel II upgrade of international rules for bolstering bank solvency.
China bank reform making good progress
HONG KONG - A relatively upbeat assessment of the Chinese banking industry's reform progress was delivered by rating agency Standard and Poor's in November, particularly for the two state-owned commercial banks selected to lead the recovery.
European ministers back stricter auditing law
BRUSSELS - European Union ministers in early December backed a law aimed at setting stricter standards for company auditors in the wake of the scandal of the collapse of Italian dairy products firm Parmalat.
New consensus needed on IAS 39 accounting rule
LONDON - The financial world needs to reach a consensus on the fundamental issues before moving to a detailed drafting of a new version of the controversial IAS 39 accounting rule on valuing financial assets and liabilities, a top UK central banker said in November.
Big US, European banks' capital ratios converge
LONDON - The big league European and US banks are maintaining very similar capital ratios, on average, according to their latest financial statements.
CIS bank reform urged to boost region's growth
MOSCOW - There is vast potential for expansion in the countries of the former Soviet Union. However, more reforms are crucial, particularly in the banking sector, if the full potential is to be realised.
Efficient regulation will boost Islamic banking
BEIRUT - Islamic banking is growing and spreading, but efficient and adequate banking supervision is needed to help it develop, according to a senior International Monetary Fund (IMF) official.
Caruana expects slower Basel II adoption
NEW DELHI - Global banking regulators do not expect the complex Basel II bank safety rules to be adopted as widely and as quickly as the current, simpler, Basel I rules that date from 1988, at least at the outset, the world's top banking regulator has said.
Basel II not easy for Latin America, Caribbean
WASHINGTON - The Basel II bank safety rules can't easily be implemented in Latin America and the Caribbean and the region's countries should be cautious about adopting them, according to the Inter-American Development Bank (IDB).
Capital cost of ducking Sarbanes-Oxley
A key report by credit rating agency Moody's has highlighted the perils of audit risk. Companies around the world should be worried, says guest contributor Tim Leech
A solvency roadmap for the world's insurers
Regulators have developed a new supervisory framework for the industry. But there are many challenges ahead, says IAIS technical committee chairman Tom Karp
US central banker warns on fair value option
GENEVA, Switzerland, December 8 - Banks thinking of using the so-called fair value option in new international accounting rules should be aware of the complexity of the possible impact on regulatory capital and loan loss allowances, according to a top US central banker.
European regulators issue accounting guidelines
LONDON, December 21 - European banking regulators today issued guidelines to help maintain the quality of the capital banks must keep to absorb losses as new international accounting rules come into effect in the New Year.
European ministers back bank capital, auditing laws
BRUSSELS, December 7 - European Union ministers today backed a raft of financial proposals ranging from radically new bank capital rules to stricter scrutiny of accountants and tougher controls on terrorism financing, Reuters news agency reported.
Basel regulators advise on accounting exclusions
BASEL, Switzerland, December 15 - Global banking regulators are asking national supervisors to consider excluding unrealised gains and losses on loans designated as available-for-sale from the definition of Tier 1 and Tier 2 capital.
Basel regulators make QIS workbooks available
BASEL, Switzerland, December 21 - Global banking regulators have suggested that templates of workbooks and instructions used in previous impact studies of the Basel II bank safety rules could be used in separate national studies now underway or planned.
Compromise on supervision fails to break EU impasse
Europe's banks lobby hard for a lead supervisor approach. But host-country supervisors are fighting to weaken the proposal By Melvyn Westlake
Doubts over early Basel II benefit for Japanese banks
Japanese regulators have issued their guidelines for Basel II, but for some there's too much pillar 1 and not enough pillar 2. David Keefe reports
Rating agency regulation rejected by market bodies
Market participants support credit rating agencies' fight against regulation. Political pressure in EU for agencies to be reined in By Melvyn Westlake
Ernst & Young lures BoE's Patricia Jackson
Patricia Jackson, the Bank of England's special adviser on financial stability, will become a partner in the risk management practice of professional services firm Ernst& Young from mid-December.
Filipino banks to adopt Basel II amid tide of corporate governance problems
Two-step introduction of new accord as supervisors struggle to enforce existing regulations and banks grapple with bad loans. But should corporate clean-up take priority?
CEBS opens its skyscraper doors for business
LONDON - Long sought cooperation among EU member states, in the promotion of financial services, will be enhanced by the setting-up in London of the Committee of European of Banking Supervisors (CEBS), according to British finance minister Gordon Brown.
Thirty banks interested in US Basel II impact study
WASHINGTON - Some 30 US banks have shown an interest in taking part in the fourth quantitative impact study - QIS 4 - into the possible effects on them of the Basel II rules for improving bank safety.
S&P warns on unwarranted capital decreases
LONDON - If the new Basel II capital framework for banks were to be applied today, the risk-weighted assets and regulatory capital requirements of most banks would likely fall, in some cases substantially, according to rating agency Standard and Poor's.
Prospects looking brighter for Asia-Pacific banks
HONG KONG - Banks in Asia are heading for better times. The restructuring that followed the east Asia financial crisis in 1997-98 is yielding positive results. Credit profiles of many banks in Asia are improving, along with many banking systems.
More thinking on second pillar urged
SYDNEY, Australia - Banks and their regulators "need to think a lot more" about the second pillar - the supervisory review process - of the three pillars of the complex, risk-based Basel II bank safety rules, a senior Australian banking supervisor said in late October.
Pakistan worries over lack of Basel II readiness
KARACHI - Pakistan's banking supervisors remain very worried about the lack of readiness of domestic banks - large, medium and small - for the risk-based Basel II upgrade of bank safety rules, the country's central bank governor said in October.
Bank hybrid-capital issues get double approval
LONDON - Brussels-based bank Fortis, and Frankfurt's DZ Bank, Germany's sixth largest, have become the first banks to raise hybrid capital that qualifies as Tier 1 for regulatory purposes and is designated either Basket C or Basket D on the scale created by Moody's rating agency to grade hybrid securities.
NZ studies Australia's single end-2007 start-date
WELLINGTON - New Zealand will take account of Australia's decision to go for a single end-2007 start-date for implementing Basel II, but there are other factors involved in New Zealand's own decision on timing.
Human rights set to be next on regulatory agenda
LONDON - Banks and investment firms, already facing a tide of new regulation and accounting standard changes, must now start paying attention to yet another area of potential reputation risk - human rights.
Singapore sees greater supervisory convergence
SINGAPORE - Greater convergence on several fronts of financial supervision will follow the Basel II upgrade of international rules for bank safety, a top Singapore regulator said in late October.
Improved grasp of credit risk transfer urged
BASEL, Switzerland - Financial supervisors need to improve their understanding of credit risk transfer (CRT) techniques and continue their efforts to share information on CRT activities, a report by the Joint Forum of banking, insurance and securities market regulators says.
Key risk indicators move up a gear
KRIs sound fine in principle, but do they work in practice? An expanded indicators library, with fifty participating banks, will provide the test. A similar project for insurers is likely soon.
Tougher regulation for insurers is on the way - are they ready for it?
European insurers are using computer systems dating back to the 1970s. Some are using a variety of different systems. The risk-focused Solvency II capital regime and the new accounting rules demand something better, says SunGard Sherwood's Gavin Lavelle
Solvency II isn't the only risk-based regulatory issue facing the insurance industry.
The introduction of IFRS in the European Union from January 1 will have a major impact on insurers.
Insurance supervisors urged to cooperate more
AMMAN, Jordan - There's clearly scope for insurance supervisors to intensify and broaden their cross-border co-operation with key policymakers, particularly with banking supervisors and accounting rule-makers, a top international banking regulator said in October.
Waking up to the true cost of compliance
Putting advanced approaches to credit risk measurement into effect is a tough task, says Quadrant's Paul Ashton. And advisors with banking experience are at a premium
UK's Bradford & Bingley chooses SunGard
UK-based bank Bradford & Bingley has selected SunGard's Basel II Capital Manager as its technical platform for achieving compliance with the new Basel II regulations and for general retail and wholesale credit risk management, SunGard Trading and Risk Systems said in October.
ING taking Aon's OpBase
Dutch banking group ING is implementing OpBase, an operational risk loss event database developed by insurance broker and risk management consulting firm Aon.
Basel II, Sarbanes driving bank IT demand
Regulatory requirements such as the Basel II bank safety rules and the US Sarbanes-Oxley corporate governance law are driving substantial investments in information technology, a study released in October shows.
Thirty banks interested in US Basel II impact study
WASHINGTON, November 4 - Some 30 US banks have shown an interest in taking part in the fourth quantitative impact study - QIS 4 - into the possible effects on them of the Basel II rules for improving bank safety, according to US regulators.
Basel II won't bring perfect home-host harmony, Caruana says
LONDON, November 11 - The Basel II rules for bolstering the solvency of the global banking system "cannot and should not be expected to create perfect harmonisation across all jurisdictions," according to the world's top banking supervisor.
Caruana expects slower Basel II adoption
NEW DELHI, November 16 - Global banking regulators do not expect the complex Basel II bank safety rules to be adopted as widely and as quickly as the current, simpler, Basel I rules that date from 1988, at least at the outset, the world's top banking regulator has said.
Australia confirms end-2007 date for Basel II
SYDNEY, November 3 - Australia, as expected, will bring the international Basel II rules for improving bank safety into effect from a single end-2007 date rather than the staggered end-2006/end-2007 dates suggested by global banking regulators.
US regulators launch fourth Basel II impact study
WASHINGTON, November 1 - US banking regulators have launched their scheduled fourth quantitative impact study - QIS 4 - into the effects on US banks of adopting the Basel II upgrade of international rules for banks safety.
EU states scrap over bigger role for lead supervisors
Bankers and European officials want to lower regulatory burden in capital directive. Host supervisors fear loss of sovereignty By Melvyn Westlake
Drive to finish new trading book rules by deadline
EU officials stress importance of March target date. Progress on some issues. Regulators seek to deliver comprehensive package By Melvyn Westlake
Tensions rising over home-host issues
Regulators around the world are questioning the relevance of a 30-year old who-does-what agreement among supervisors. Could home-host relations be the Achilles' heel of Basel II? By David Keefe
Kazakhstan banks to apply accord far ahead of Russia
Sustained reforms put Kazakh banks on course for Basel II, while poor corporate governance leaves Russian banks trailing
Court challenge looms over SEC hedge fund proposal
WASHINGTON - If William Donaldson, chairman of the US Securities and Exchange Commission (SEC) pushes ahead with his controversial plan for the registration of hedge fund advisers, a legal challenge looks almost certain.
Reinsurers set to play regulatory catch-up
LONDON - European reinsurance firms have faced a "surge of regulatory interest" in recent years, and there are a number of regulatory initiatives in the pipeline that are likely to affect them. But this could produce material benefits in the longer term, according to rating agency Standard & Poor's.
Data problems queer Korean banks' accord aims
SEOUL - South Korean banks face a tough struggle to meet their goal of adopting the more sophisticated credit risk methodology under the new Basel capital accord.
New rules could trigger Indian bank consolidation
BANGALORE - Implementation of the Basel II bank capital rules could trigger a round of consolidation in India's banking sector, according to a top Indian central banker.
Australia favours common end-2007 start for Basel II
SYDNEY - Australia's regulators are likely to announce shortly a common end-2007 start-date for implementing the Basel II capital rules, rather than the staggered end-2006/end-2007 dates proposed by global banking regulators, banking industry sources say.
China aims for Core Principles by 2009
BEIJING - China's banking regulator plans to bring its supervisory regime up to internationally accepted levels in five years to ensure stability in the nation's banking sector, the China Daily newspaper reported in mid-October.
Williams appointed Acting US Comptroller
WASHINGTON - Julie Williams became Acting Comptroller of the US Currency in succession to John Hawke, who completed a five-year term as Comptroller on October 13.
Securitisation to gain from accord disclosure rules
LONDON - Transparency of securitsation deals in the European capital markets, which is currently inadequate, could be considerably improved in coming years as a result of the disclosure provisions in the new Basel capital accord, predicts rating agency Standard and Poor's.
IAS 39 row not a reason for US rejection of IFRS
WASHINGTON - The US Shadow Financial Regulatory Committee, a body of independent experts that analyses trends in the financial services industry, says the row over the IAS 39 accounting rule in Europe is not a good reason for US regulators to reject new international accounting rules.
HK turns focus on pillar 2
HONG KONG - Planning for the pillar 2 supervisory issues of Basel II is possibly even more challenging than for pillar 1 capital requirements, because pillar 2 is not simply a matter of choosing between a limited number of options, a senior Hong Kong regulator said in September.
Best practice to spread beyond Basel-II banks
NEW YORK - US regulators expect the best risk management practices to spread beyond the largest US banks, even to those banks not required to adopt the Basel II upgrade of international rules for bank safety, US Federal Reserve Board chairman Alan Greenspan said in early October.
Bank & insurer regulators share accounting challenge
MADRID - Banking and insurance supervisors share two challenges - the need to ensure that accounting standards and prudential rules are mutually consistent, and the need to strengthen the system-wide orientation of prudential rules.
Fair-value option up in the air
Split with regulators over fair value presents major difficulties as Europe's partial adoption of IAS 39 threatens confusion. Failure to resolve differences over fair value could mean regulators taking their own measures to protect the integrity of regulatory capital David Keefe reports
Accounting rule-makers need better banking nous
Accounting standard setters need to understand better the business of banking, according to Basel Committee accounting task force chairman Arnold Schilder.
Federal or state - or just getting SMART?
Another round of Congressional hearings led to renewed debate over whether state or federal regulation of the US insurance industry, or something in between, is best. Here's a review of some of the testimony.
UK warns on accounting threat to Solvency II
European regulators would have to think again about the development of the risk-based Solvency II insurance safety regime, if a related key accounting project were "to lose its way," a senior British regulator said in October.
Can the Basel II approach to governance work for SOX?
The operational risk provisions of the new capital accord could fill big gaps in Sarbanes Oxley for managers of all companies, says guest contributor Bruce McCuaig
US central banker warns on Basel II home-host tensions
WASHINGTON, October 4 - The complex Basel II upgrade of international rules for bank safety may raise tensions over so-called home-host supervision issues, a top US central banker warned today. But significant efforts are being made to reduce any potential trouble.
EU backs partial IAS 39 endorsement
BRUSSELS, October 1 - European Union member countries today agreed, as widely expected, a watered down version of the contentious IAS 39 accounting rule on valuing financial instruments such as bonds, shares and, crucially, derivative contracts.
Greater supervisory convergence seen after Basel II
SINGAPORE, October 26 - Greater convergence on several fronts of financial supervision will follow the Basel II upgrade of international rules for bank safety, a top Singapore regulator said today
UK plans QIS 4 Basel II study, sticks by end-2007 date, plans IAS 39 paper
LONDON, October 8 - The UK is undertaking a fourth quantitative impact study - QIS 4 - of the effects on banks of the Basel II safety rules and is holding out for a single end-2007 start date for the European version of the Basel capital adequacy accord, one of the country's top financial regulators said today.
Banks rebuff regulators over reputation risk
Policy guidance on complex financial transactions triggers strong reaction. Banks resist being turned into financial policemen By Melvyn Westlake
UK regulator rules out any further Basel II changes
Hector Sants, senior official at Britain's Financial Services Authority tells GRR the June 26 accord must be viewed as "final" By Melvyn Westlake
US mulls meaty revisions for Basel I banks
Regulators' letters to lawmakers indicate risk-sensitive rules likely for smaller banks. No op risk changes for Basel II banks
Half the world getting ready to join new capital regime
Over 100 countries may adopt new bank capital rules, but regulators are anxious that they know what they're doing. Here we provide a regional roundup of the possible participants
Lifting the veil on Gulf states' Basel II aims
Banks in the six Gulf states are forecast to adopt new capital accord. High profits and strong capital ratios ease the way
Canadian banks to be offered full Basel II menu
OTTAWA - Domestic Canadian banks with total regulatory capital greater than Can$5 billion (US$3.85 billion), or with international assets or liabilities exceeding 10% of the bank's total, will be "expected" by supervisors to implement the most advanced credit risk measurement under the new Basel capital adequacy accord.
Russian banking is ripe for major clear out
MOSCOW - Banking reform in Russia has started to move again after nearly a decade of inactivity. Despite the turbulence that hit the banking sector in the early summer, rating agency Standard & Poor's is positive about the outlook.
New EU body aims to cut national discretions
LONDON - The recently-formed Committee of European Banking Supervisors (CEBS), which advises the EU Commission on technical aspects of financial legislation, has been charged with trying to reduce the 80-odd national discretions that have been introduced into the Basel II capital accord during five years of negotiations.
US Comptroller Hawke still has Basel fears
WASHINGTON - US Comptroller of the Currency John Hawke, shortly to leave office, is still worried about the possibility that rapidly evolving risk management practices could outpace the Basel II upgrade of international rules for bank safety.
Brazil expects gradual adoption of capital accord
MEXICO CITY - The Basel II rules for bank safety are likely to be implemented in a gradual manner in Brazil, with the new rules coexisting for a while with the old ones, according to a top Brazilian central banker.
Merger would herald Japan banking recovery
TOKYO - Bank analysts are taking an upbeat view of the proposed merger between Mitsubishi Tokyo Financial Group (MTFG) and United Financial of Japan (UFJ), to create the world's largest bank.
India awaits Basel-II competitive impact
MUSSOORIE, India - It's too early to assess whether the Basel II upgrade of international rules for bank safety will give foreign banks a competitive advantage over domestic banks in emerging economies, according to the head of India's central bank.
Internal ratings will boost risk management globally
NEW YORK - The more sophisticated measure of credit risk that forms an essential element in the new, Basel II capital adequacy framework, will help to promote stronger risk management practices among those banks around the world that adopt this approach.
Australia hastens slowly over IFRS/Basel II changes
SYDNEY, Australia - The need to co-ordinate with global banking regulators on the regulatory implications of new accounting rules is a major reason for "hastening slowly" with introducing the rules into Australia's prudential standards, a top Australian regulator says.
Possible NZ-Australia clash over capital rules
WELLINGTON - It's too early to tell whether there will be a divergence between New Zealand and Australian banking supervisors over the implementation of Basel II rules for bank safety, says a senior New Zealand regulator.
More wrangling and acrimony over IAS 39
The saga of the embattled IAS 39 accounting rule continues with Europe seeking a diluted version and regulators embroiled on other fronts. David Keefe relates a tortuous tale.
The many challenges of Solvency II
Europe's Solvency II insurance show is getting on the road as experts start to wrestle with the details of the supervisory review process. But the timetable's a tough one. David Keefe reports
Singapore risk rules anchor insurance prospects
The new capital framework now in place in Singapore is seen as a positive development for a resilient insurance industry
QIS4 - the critical test of banks' Basel II systems
US banks need powerful systems for Basel II. Only then will they be able to benefit from the fourth quantitative impact study, says guest contributor Dean Jovic of SunGard.
Europe hopes for diluted IAS 39 adoption by end-November
BRUSSELS, September 30 - The European Commission hopes by the end of November to adopt the diluted version of the much disputed IAS 39 accounting rule for valuing financial instruments. The version `carves out' contentious parts of the rule for resolving later.
Supervisors must bridge cross-border gap
MADRID - Bank supervisors must bridge a long-standing gap in cross-border ties as globalisation and sweeping changes to bank safety rules force regulators to work closer together, the world's top regulator said last week.
UK stresses limit to home-host model
LONDON - It's important to recognise the limitations on the simple reliance on home and host regulator as one of the twin pillars of international financial regulation, Britain's top financial regulator said last week.
Australia favours common end-2007 start for Basel II
SYDNEY, Australia - Australia's regulators believe there's a strong case for implementing Basel II from a common end-2007 date, rather than the staggered end-2006/end-2007 start proposed by global banking supervisors.
New rules could trigger Indian bank consolidation
BANGALORE, India - Implementation of the Basel II bank capital rules could trigger a round of consolidation in India's banking sector, according to a top Indian central banker.
Hong Kong turns focus on pillar 2
HONG KONG - Planning for the pillar 2 supervisory issues of Basel II is possibly even more challenging than for pillar 1 capital requirements, because pillar 2 is not simply a matter of choosing between a limited number of options, a senior Hong Kong regulator said this week.
Big problems seen in resolving IAS 39 fair-value option dispute
LONDON, September 24 - International accounting rule-makers are likely to face great difficulties in resolving differences between financial regulators and the financial services industry over the so-called fair value option in the already contentious IAS 39 rule on valuing financial instruments.
Accounting rules are key in Basel II, says Caruana
MADRID, September 22 - Sound accounting and provisioning standards are a key element that must be built into the foundation of the Basel II upgrade of international rules for bank safety, the world's top banking regulator said today.
Retiring US Comptroller Hawke still has Basel-II worries
WASHINGTON, September 10 - US Comptroller of the Currency John Hawke, shortly to leave office, is still worried about the possibility that rapidly evolving risk management practices could outpace the Basel II upgrade of international rules for bank safety.
UK fears IAS 39 dilution could hurt Basel II/Solvency II
LONDON, September 9 - British financial regulators fear the threatened adoption in Europe of a diluted version of the controversial IAS 39 accounting rule could undermine the effectiveness of risk-based regulation of banks and insurers.
Politics take front stage as EU unveils capital rules
Divisions emerge over "consolidating supervisor" approach. Surprise and glee over tough "supervisory disclosure" provisions By Melvyn Westlake
Now Basel Core Principles come under spotlight
Changes likely in the 1997 core banking standards. Review to be launched in September. Basel Committee exploring closer links with developing countries.
Will supervisors have too much discretion under the new regime?
Supervisors are displaying heightened concern about future capital levels of sophisticated banks. Market discipline should be enhanced, says Harald Benink, in a guest column
Will "supervisory review" be boon or costly burden?
The new capital accord's pillar 2 - supervisory review - is a complex, resource-intensive process. Few regulators have any experience of it. Yet how this process works is crucial, says guest columnist Simon Hills
Accord gets "broad" backing from key bank body
Broad approval for the new capital adequacy accord has come from the Washington-based Institute of International Finance (IIF).
Problems remain over information disclosure
Does the new capital accord still oblige banks to provide the wrong information to the markets under the pillar 3 disclosure rules? Ray Soifer gives a personal view
Singapore supervisor urges more guidance
One of the biggest challenges for supervisors is to develop more detailed guidance for the implementation of the pillar-2 supervisory review process under the three-pillar Basel II structure, a top Singapore regulator said in July.
Capital quality coming under regulators' scrutiny
The defintion of capital is one major element left out of the new regulatory regime. The Basel Committee is signalling its intention to tackle this omission By Melvyn Westlake
The unanswered questions that still surround operational risk
Basel II brings operational risk capital charges to banks for the first time. But problems still need ironing out. And home/host implementation issues remain fraught, says guest contributor and former regulator Victor Dowd
EVCA welcomes private equity concession
The European Private Equity and Venture Capital Association (EVCA) welcomed the significant reduction in the levels of capital European banks will have to hold for private equity and venture capital investments under the European version of Basel II compared with the Basel original.
Rule change hopes still alive for securitization
Despite publication in late June of what has been described as the final version of the Basel II capital adequacy rules, securitisation industry representatives on both sides of the Atlantic continue to believe that further amendment is still possible.
Elusive quest for consistent accounting and capital regs
Bank regulators have striven to ensure that pillar 3 requirements for information disclosure don't conflict with accounting rules - with only partial success David Keefe reports
SEC closes in on the US hedge fund industry
WASHINGTON - The US Securities and Exchange Commission's proposed new rule requiring hedge fund advisers to register with the Commission looks set to face fierce opposition from sections of the industry, politicians and even other regulators.
Basel II countries could exceed 100
BASEL, Switzerland - How many countries plan to adopt Basel II? At least a hundred according to a survey being finalised by the Financial Stability Institute (FSI), the Basel-based body formed five years ago to help supervisors around the world to strengthen their financial systems.
Shadow financial regulatory group formed in Asia
TAIPEI - The Asian Shadow Financial Regulatory Committee (ASFRC), comprising professors of finance and other academics, has been formed to mirror the shadow financial regulatory committees set up in the US and other regions of the world.
SEC adopts backdoor Basel rules for investment firms
WASHINGTON - A rule that opens the way for major US investment banks to come within the new risk-based Basel capital framework has now been formally adopted by the Securities and Exchange Commission.
UK debt recovery rates outstrip France, Germany
LONDON - Debt recovery experiences of European banks vary quite widely across countries, depending on factors such as the insolvency regime in which the default occurs, the quality of collateral involved and banking practices, according to a major study by Standard & Poor's Risk Solutions.
Australia will commit to Basel II timetable
SYDNEY - Australia is committed to adopting the Basel II bank safety rules on a similar timetable to other major countries, the country's top financial services regulator said in early July.
HK warns on Basel II, IFRS
HONG KONG - Banks should not think they can simply sub-contract the implementation of the Basel II rules for bank safety to third party service vendors, such as their external auditors, Hong Kong's top banking supervisor said in June.
OTS presses Congress for Basel seat
WASHINGTON - The Office of Thrift Supervision (OTS), the federal agency that regulates the US savings and loans industry, urged Congress in June to back its bid for a seat on the Basel Committee on Banking Supervision.
US lawmakers put heat on regulators over accord
Congressional hearings reignite op risk debate. Letter from lawmakers seeks answers. Basel II critics remain confident By Melvyn Westlake
Interview: Kathleen Marinangel, America's Community Bankers
Let banks choose whatever system best suits them - Small US banks fear that US policy on Basel II will hit them competitively while denying them the advantages of the risk-focused capital rules. By David Keefe
US Congressional testimony
Basel II supporters outnumber dissenters - On June 22, the Financial Institutions Sub-committee of the House of Representatives Financial Services Committee held fresh hearings into the new Basel capital accord. Hearings concentrated on "private sector perspectives." Here is a selection of points raised by the testimony
Britain puts down marker for European insurance regulation
The UK is introducing new risk-based capital rules for insurers at the end of the year. How influential will they be for Solvency II in the EU?
Big IT impact expected from Solvency II
The European Commission's Solvency II project for improving the safety of Europe's insurance industry will have an enormous impact on the IT systems of insurance companies, Gavin Lavelle, president of insurance technology specialist SunGard Sherwood Systems, told a conference in June.
Best practice pressure prompts countries to adopt Basel II
Basel, Switzerland, August 4 - Many countries are motivated to adopt the complex Basel II upgrade of international rules for bank safety, whatever their reservations, by the need to show global markets their adherence to best practice.
IAS 39: hostile reaction to fair-value option proposal; European Commission readies partial endorsement idea
BRUSSELS, August 9 - Yet another controversy has emerged in the tangled saga of the much disputed IAS 39 accounting rule on valuing financial instruments that's bitterly opposed by some European banks.
EU completes partial adoption proposal for IAS 39
BRUSSELS, August 11 - The European Commission has sent the completed details of its controversial proposal for the partial endorsement of the disputed IAS 39 accounting rule on valuing financial instruments to a key Commission committee for review.
News round-up: US & Basel II; Solvency II; IAS 39
LONDON, August 20 - Here's a GRR round-up, amid the August doldrums, of some recent news on risk-based regulation in the US and Europe:
Basel II countries could exceed 100; Singapore warns on Pillar II issues
SAN PEDRO SULA, Honduras, July 12 - It's possible that more than 100 countries will adopt the Basel II upgrade of international rules for bank safety, the world's top banking supervisor has said.
No decision in IAS 39 row - Commission to continue working on problems
BRUSSELS, July 9 - The European Commission, the executive arm of the European Union, will continue working with EU member states on preparing the endorsement of the controversial IAS 39 accounting rule, a Commission spokesman said today.
Europe confirms Cad-3 timetable compromise
BRUSSELS, July 14 - The European Commission today confirmed that European banks and investment firms will be allowed to operate under current Basel I safety rules until the end of 2007.
Regulators aim to solve double default issue before Basel II comes into effect
MADRID, July 6 - Global banking regulators aim to find a sound solution to the so-called "double default" question in the Basel II upgrade of international rules for bank safety as soon as possible and prior to implementation of the rules, the world's top banking supervisor said today.
Split advisory group adds another twist to IAS 39 row
BRUSSELS, July 8 - A key accounting advisory group says it can't give any advice to the European Commission on whether to endorse the bitterly disputed IAS 39 accounting rule on valuing financial instruments such as derivative contracts.
UK warns on Commission bid to solve IAS 39 accounting row
LONDON, July 6 - The UK's top financial regulator warned that an eleventh hour bid by the European Commission to unblock an impasse with the banking industry over the fraught IAS 39 rule threatens to undermine the goals of new international accounting rules.
Tighter UK insurance capital rules seen as blueprint for Solvency II
LONDON, July 2 - UK regulators today issued new and tighter risk-based rules determining how much capital British life and non-life insurers need to hold in order to bolster their solvency and absorb any losses from the risks of the insurance business.
UK sticking by end-2007 demand for Cad 3/Basel II
LONDON, July 15 - The UK isn't satisfied with the compromise timetable announced yesterday for bringing the Basel II upgrade of international bank safety rules into effect in Europe - it wants implementation delayed until 2007.
EU Commission to propose "compromise"
LONDON, July 6 --The European Commission seems almost certain to recommend a "compromise" option for the implementation of its capital adequacy directive by the 7,400 banks in its 25 member countries.
Deep EU split over timing of new capital regime
Letter from EU Commission spells out options. Heavy lobbying by German and French banks. A favoured option could upset US By Melvyn Westlake
Banks fear Basel II effects on developing countries
Lending to some countries could be strangled because new capital rules fail to give enough recognition to risk diversification By David Keefe
New capital rules a must for emerging economies
Asian and other emerging market countries should choose the parts of Basel II they like and not worry about the rest.
Hedge funds shun regulators' attentions
A lack of financial disclosure by hedge funds is viewed with concern. Can they be brought within the regulators' net? By Melvyn Westlake
US agencies tackle reputational risk
Regulators instruct banks on avoiding reputation damage. Concern to eliminate Enron-style complex financial structures. But some fear proposals are too sweeping
Banking industry hails latest pillar 2 principles
LONDON - "A huge advance" is the way bankers have hailed the latest consultation paper spelling out how the supervisory review process might work under the European Union's proposed capital adequacy directive.
EU-US securities regulators to boost cooperation
AMSTERDAM - Securities supervisors in Europe and the US are planning to cooperate much more closely to minimise risks of disorderly markets and to bring transatlantic regulatory practices closer into line.
Fears over rapid growth in Chinese bank lending
HONG KONG -- A stark warning that the rapid lending growth of Chinese banks could be building up new risks has come from Moody's rating agency.
Hedge fund threat to credit risk transfer
FRANKFURT am MAIN - Close cooperation between financial supervisors must be maintained in case a crisis emerges from the increasing hedge fund involvement in the credit risk transfer market, says a European Central Bank (ECB) report* issued in May.
Closer academic-regulator links urged
BRUSSELS - Maintaining closer links between academics and banking regulators will be important in the implementation phase of the Basel II rules in Europe, Belgian central bank governor Guy Quaden said in May.
Renewed Fed backing for hybrid bank capital
WASHINGTON - US bankers emitted a collective sigh of relief in May with the issuance of the keenly awaited new rule proposed by the Federal Reserve Board to revise the types and amounts of securities that qualify as Tier 1 capital for bank holding companies.
Single supervisor threatens key central bank role
BRUSSELS -The single supervisor model of financial regulation has the potential to undermine a central bank's ability to manage financial crises, a top US central banker said in May.
Singapore revises capital framework
SINGAPORE - Singapore cut the minimum capital adequacy ratio (CAR) for local banks to 10% from 12% in late May as it made changes to the CAR framework to allow domestic banks to manage their capital more flexibly.
Regulators confirm own-credit rating exclusion
BASEL, Switzerland - Global banking regulators confirmed in early June that they would exclude gains and losses from changes in a bank's own credit rating and from cash flow hedges from the calculation of regulatory capital.
Korean banks prepare for their "destiny"
Regulators take a studied approach to Basel II. But competitive pressures and pride seem to make adoption inevitable
An invitation to the party
US policy on Basel II might have been different had the Office of Thrift Supervision joined the debate earlier. Now the OTS is fully involved. It suggests smaller US banks should consider adopting the new accord. David Keefe talks to OTS managing director Scott Albinson
Will Basel kill Europe's golden goose?
By classifying all private equity and venture capital investments as high risk, the New Basel Accord overlooks the fact that the riskiness of the asset class varies hugely depending on the investment channel used, argues the leading representative of the private equity industry in Europe*
Seizing the chance to bring IT together
Banks face a mammoth and costly task consolidating their IT for Basel II. And many are lagging behind, says CSC's Anita Bradshaw in this guest feature.
What they say: devil's in the Solvency II detail
Eleven EU governments responded to the European Commission's further paper in April, dealing with the risk-based Solvency II project for improving the safety of the Europe's insurance industry. The Commission hopes to have a draft Solvency II directive out next year, Here's a selection of the government comments
Bank regulators set to issue landmark Basel II accord this weekend
Basel, Switzerland, June 25 - Basel committee regulators from 13 leading industrial countries are meeting here today to give their final approval to the landmark accord on bank capital that is due to be published at 8pm on Saturday (local time).
France backed in block to IAS 39 accounting rule
BRUSSELS, June 14 - France was backed by three other European Union nations today in blocking adoption of a controversial accounting rule, IAS 39, increasing doubts that the rule can be adopted in its current form by January 1, 2005.
Caruana urges staged approach for countries unready for Basel II
WASHINGTON, June 3 - The world's top banking supervisor has suggested a three-stage approach for countries that want to adopt the complex Basel II bank solvency rules but which may not yet be ready to do so.
Basel II endorsement - challenges ahead
LONDON, June 28 - Many of the world's largest banks see significant challenges remaining in their preparations to implement the complex Basel II upgrade of international rules for bank safety, according to a global survey of banks undertaken in April and May.
Way cleared for Europe's endorsement of IAS 39 accounting rule, sources say
BRUSSELS, June 9 - International accounting rule-makers have come up with a `presentational solution' that could clear the way for the European Commission to endorse the so-called IAS 39 rule that has provoked fierce opposition from some banks.
Basel II drafting work on course
BASEL, Switzerland, June 13 - Work on completing the text of the complex, risk-based Basel II revamp of international rules on bank safety remains on course, regulatory sources said after global banking regulators set June 26 - a Saturday - as the release date for the new rules.
"Landmark" Basel II issued amid fulsome G 10 support
BASEL, Switzerland, June 27 - Hailed as a "landmark achievement" and a "genuine success story in international cooperation," the nw Basel accord for bank capital standards was issued on Saturday evening here.
Milestone Basel II deal gets tepid reception
Regulators announce "consensus" over outstanding accord issues. Bankers say the deal invites more questions than answers. By Melvyn Westlake
Europe snares commodity firms in capital directive
Long-simmering problem hits radar screens as new rules treat commodity firms like banks, say critics. David Keefe reports
Glowing report gives boost to new EU bank capital regime
Impact study finds strong benefits and few problems with the proposed EU bank regulations. Main concern is fairness in implementation Melvyn Westlake reports
Enlargement brings fears of Cad 3 delay
European Union enlargement brings another uncertainty into the process for converting the complex, risk-focused Basel II rules for improving bank safety into European law.
Germany's last ditch push to undo reinsurance regs
Some claim that April's reinsurance directive will seriously disadvantage them. Industry gears up for intensive lobbying
Liquidity risk to come under regulatory scrutiny
LONDON -- Liquidity risk is now coming under the microscope, with banking, insurance and securities regulators starting to look at whether approaches to managing this type of risk can be better harmonised both within the European Union and more globally.
Majority say "yes" to new accord - survey
BIRMINGHAM, Alabama -- Half of the 66 countries that responded to an international survey conducted earlier this year indicate that they intend to apply the new Basel capital adequacy accord within their own banking systems.
Rebalancing of Basel's three pillars urged
BRUSSELS -- The three pillars of the new Basel accord on bank capital need rebalancing or the effectiveness of the project to bolster the solvency of the world banking system could be undermined, according to a new report.
No IMF pressure on countries over Basel II
WASHINGTON DC -- The International Monetary Fund (IMF) and the Work Bank, the sister Washington-based multinational agencies, have no intention of pushing countries into implementing the new Basel II international capital accord.
Capital accord seen as great opportunity for Asia
HONG KONG - Asian economies and banks should look on the Basel II upgrade of international rules for bank safety "as a great opportunity", a senior Hong Kong banking supervisor said in early May.
Italian economist to head EU bank supervisory body
LONDON -- The first secretary general of the EU's potentially powerful new Committee of European Banking Supervisors (CEBS), based in London, will be Andrea Enria, currently head of financial supervision at the European Central Bank, in Frankfurt.
South Korean banks urged to prepare for Basel II
SEOUL - South Korea Financial Supervisory Commission chairman Lee Jung-Jae, urged local banks in May to prepare for the implementation of the Basel II upgrade of international capital rules for banking safety, the Korea Times newspaper reported.
ORX database plans membership drive
Joe Sabatini, new chairman of the Operational Riskdata eXchange (ORX) executive committee, says his priorities include a drive for new members and further leveraging ORX's expertise and data with regulators and other industry groups.
Fears prompt limit on "fair value" option
LONDON - Global accounting rule makers responded to banking regulator concerns in late April by proposing a limit on the use of the so-called fair value option in the new international accounting standards (IAS).
FRS licenses reporting product to HBOS
LONDON - Regulatory reporting software provider FRS said in April its FRS FinancialAnalytics product has been licensed to UK banking group HBOS.
New risk-based rules for Lloyd's market
LONDON - UK regulators took another step in late April to improve risk management at the Lloyd's of London insurance market and ensure the market is properly capitalised for the risks it faces.
Basel won't recognise `own-credit-standing' effects
LONDON - Global banking regulators have decided that they will probably not recognise for regulatory purposes a gain or loss in bank capital that stems from a change in a bank's own creditworthiness, regulatory sources say.
Banks need IT partners to minimise costs
BOSTON, Massachusetts - Banks will need to find technology vendors that can truly act as partners, given the growing number of IT products and ever-changing regulations, research firm Celent Communications said in an April report on IT spending trends in Europe.
FRS/i-flex agree joint regulatory reporting
NEW YORK - Regulatory reporting software specialist FRS and financial IT provider i-flex solutions are jointly offering a service for the delivery of regulatory data between financial firms and central banks.
Shedding a little light
Basel regulators have elaborated their formula for resolving the Basel II op risk group allocation problem. Is it enough?
Basel II creeps ontoTaiwan banks' crowded agenda
New regulator finally takes over as bank problems recede. But impact will be slow. Banks start preparing for capital accord
Long, hard slog towards Solvency II
Europe's Solvency II insurance supervision project will be a major test of the Lamfalussy process. It looks like a long haul with accounting uncertainties predominating. By David Keefe
What they say: Two cheers for Solvency II paper
The European Commission's February working paper* on Solvency II attracted comment letters from some 30 states, trade organisations, insurance firms, specialists and consultants. Here's a cross section of what they say
Regulators meet to consider sweeping new rules for banks
LONDON, May 10 - Bank regulators from leading industrial countries are set to meet this evening (Monday) in Basel, Switzerland to finalise the package of proposals that will be presented to a landmark, two-day meeting of the full Basel Committee, starting Tuesday.
Europe still to decide on new Basel II dates
BRUSSELS, May 14 - The European Commission has yet to decide whether to follow the new two-stage timetable proposed earlier this week for bringing the Basel II bank accord into effect.
Agreement reached on landmark Basel II capital accord
BASEL, May 11 - The Basel Committee of bank regulators from 13 leading countries announced today (Tuesday) that it had reached a consensus on its sweeping revamp of rules to bolster the solvency of the world's banking system.
All set for landmark deal on Basel II capital accord
Basel Committee certain to approve accord text at key May meeting. Controversy continues over document's actual status By Melvyn Westlake
Group allocation problem splits banking industry
The op risk group allocation question will be one of the issues left outside of the Basel II draft document. Many banks remain unhappy with current proposals. David Keefe reports
Fighting the regulators' corner
Basel Committee will decide soon on urgent `own credit standing' accounting problem. Still significant differences over incurred losses but progress seen on fair value option Interview: Arnold Schilder, head of Basel's Accounting Task Force
Regulators and accountants start to build bridges
IASB deputy chairman claims loan loss provisioning problems mostly resolved. But significant differences remain, say Basel regulators By Melvyn Westlake
Egypt's tardy bank reforms running out of time
State banks are under-capitalised and their bad debts are mounting. The Basel II accord is a low priority for most
US investment firms march to the Basel II drum
WASHINGTON - Basel II risk-based capital standards are likely to be extended to the world-wide activities of the top five American investment banks under a new rule of the US Securities and Exchange Commission (SEC) that is expected to be approved soon.
Big savings seen for banks going slow on Basel II
LONDON -- Contrary to the advice being given by many consultants, there is a strong case for British banks not to rush into large expenditure just to comply quickly with the more advanced credit measurement approaches under the new Basel capital accord, according to a new study.*
Easier-to-follow accounting rules wanted
LONDON - Global standards setters plan to make it easier to follow the cumulative effect of the development of new accounting rules to help improve consultation procedures, International Accounting Standards Board (IASB) officials said in late March.
Call for convergence of EU and US securities regulation
WASHINGTON -- The Securities Investment Association (SIA) is calling on securities supervisors in the US and Europe to be more proactive in eliminating barriers to efficient transatlantic securities operations, and achieving regulatory convergence in key areas.
Latin America's readiness for Basel II queried
SANTIAGO de CHILE - The world's top banking regulator said in late March he'd like to see a dialogue going ahead between Latin American banks and their supervisors on implementing the Basel II upgrade of international rules for bank safety.
CEBS gets off to a flying start at London meeting
LONDON - The priorities and work programme of the potentially highly influential new Committee of European Banking Supervisors (CEBS) became apparent at the end of March, following its meeting at the Guildhall in the City, London's financial district.
EU's Bolkestein confident IASB row will be resolved
LONDON - International accounting rule makers declined direct comment in early April on news that Europe's top financial regulator is confident the European Union can resolve the row over certain new accounting standards for banks and insurers ahead of planned adoption in January 2005.
Level Basel playing field pledge for smaller US banks
SAN DIEGO - US regulators are pledged to take whatever steps are necessary to retain a level playing field if there are signs of a competitive problem for smaller US banks from the Basel II capital rules, US Federal Reserve Board chairman Alan Greenspan said in mid-March.
IBM launches Basel II info management product
SOMERS, New York - IBM has launched a new service combining software, hardware and consulting services that it says can help banks manage information in a way that is more consistent with obligations under the Basel II capital accord.
S&P launches LGD model
NEW YORK - Standard & Poor's Risk Solutions introduced its LossStats Model, a tool for estimating loss given default (LGD) in credit risk, with the launch of a US version of the model in April.
Malaysia's two-stage Basel implementation
KUALA LUMPUR - Malaysia will implement the Basel II upgrade of bank safety rules in two phases with the first phase beginning in January 2008, Malaysian central bank governor Zeti Akhtar Aziz said in April.
Little room for compromise on Basel-II credit card issue
WASHINGTON - There's little room for "substantive compromise" over the treatment of certain retail credit products, in particular unused credit card lines, in the Basel II upgrade of international bank safety rules, US Comptroller of the Currency John Hawke said in early April.
EU reinsurance regs loom as Germany fights for changes
Troubled reinsurance sector caught in Europe's regulatory net for first time. Last minute wrangling over key aspects of directive By Melvyn Westlake
Fair rules wanted
European insurers want uniform rules from Solvency II. And Solvency II needs a resolution of the accounting dilemma.
Mapping a free-market future
Lawmakers are proposing a federal-state partnership to regulate a US insurance industry shorn of price controls. Is it a pragmatic answer or a recipe for confusion?
Is leasing getting a raw deal?
Leasing firms want the Basel regulators to accept the fact that they own the equipment they lease out. That makes leasing a lower risk business than lending money, says Mathias Schmit.
IASB limits fair value option in response to regulator fears
LONDON, April 21 - Global accounting rule makers responded to banking regulators' concerns today by proposing a limit on the use of the so-called fair value option in the new international accounting standards (IAS).
Europe launches delayed reinsurance directive
BRUSSELS, April 21 - The European Commission today issued its delayed proposed directive for the `fast track' supervision of Europe's reinsurance industry to help reinforce financial stability.
Greenspan hopes for credit card consensus, says all US agencies committed to Basel II
WASHINGTON, April 22 - US Federal Reserve Board chairman Alan Greenspan has said he hopes US federal banking agencies can "close the gap" on the treatment of credit cards in the complex Basel II upgrade of international rules for bank safety.
Caruana says 99.9% of Basel II issues resolved
FRANKFURT-AM-MAIN, Germany, April 27 - Global banking regulators have cleared up 99.9% of the outstanding problems in the international Basel II pact aimed at bolstering bank solvency, the world's top banking supervisor said in an interview published today.
Basel II seen giving small boost to European economy
BRUSSELS, April 28 - The Basel II upgrade of minimum capital rules for bank safety should result in a small reduction in bank capital requirements and thus give a small boost to the European Union economy, according to a study requested by the European Commission, the EU's executive arm.
US regulator says little room for compromise on Basel-II credit card issue
WASHINGTON, April 2 -There's little room for "substantive compromise" over the treatment of certain retail credit products, in particular unused credit card lines, in the Basel II upgrade of international bank safety rules, US Comptroller of the Currency John Hawke said this week.
EU's Bolkestein confident IASB row will be resolved
LONDON, April 5 - International accounting rule makers declined direct comment today on news that Europe's top financial regulator is confident the European Union can resolve the row over certain new accounting standards for banks and insurers ahead of planned adoption in January 2005.
EU issues second paper on Solvency II insurance regime
BRUSSELS, April 6 - The European Commission has issued a further paper on its proposed risk-based Solvency II regime for Europe's insurance industry which discusses areas for work that weren't dealt with in a previous paper issued in February.
Optimism grows in US over tough Basel II issues
Regulators intensify search for agreement ahead of mid-year deadline. Lawmakers adopt more conciliatory stance By Melvyn Westlake
New EU push for insurance solvency regime
Europe's regulators are putting flesh on the bones of Solvency II framework. Accounting issues hold the key. David Keefe reports
Successful outcome is confidently predicted for Basel II negotiations
Upbeat assessment of accord progress. A "good" and "substantive" product achieved. US expected to back it. Committee holding to timetable. By Melvyn Westlake Interview: Jaime Caruana, head of the Basel Committee
EU bank capital timetable "tight," but do-able
Europe's new bank supervisory body is gearing up. Its chairman, José Mariá Roldán, tells GRR that the EU's capital adequacy directive is a top priority. Secretary-general to be named soon
Drive for bigger Basel II securitisation changes
Many in Europe's asset-backed securities market remain unhappy with new capital rules despite latest proposed changes. Discussions are intensifying By Melvyn Westlake
Grappling for a plastic solution
Banks are complaining that Basel-II capital charges against credit card defaults are now too high. US regulators are struggling to agree on a solution
Zero hour approaches
Lack of trust is the issue, says Europe's top regulator, as arcane disputes continue over IAS 39 and insurer mismatches
Trading book review group widens its agenda
The new joint committee bringing together Basel bank regulators and securities markets supervisors, to look at capital adequacy requirements for the trading activities of banks and investment firms, is likely to spread its net more widely than initially thought.
US regulator wants urgent clean-up of bank capital
WASHINGTON - Banking supervisors should `clean up' their definition of capital as a first step to getting the regulatory fundamentals right as US banks head for fresh expansionary times, a top US federal banking supervisor said in March.
South Korea supervision needs improving
SEOUL - The shortcomings of South Korea's hastily introduced system of integrated financial supervision in 1998 have been made good to a great extent, but a number of areas still call for improvement, the country's central bank governor said in February.
Glowing report card for Kuwait banks
KUWAIT - The banking sector in Kuwait is one of the strongest in the Gulf region, and among emerging markets, according to the report card just produced by bank credit analysts at Standard & Poor's, the credit rating agency.
Basel II poses challenge for West African supervisors
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