 |
|
|
|
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
ACCRA - Banking supervisors in West and Central Africa face very difficult tasks and challenges with the Basel II upgrade of international minimum capital rules for bank safety, Bank of Ghana governor Paul Acquah said in February as reported by the Ghana News Agency.
Scathing report on National Australia Bank
MELBOURNE, Australia - National Australia Bank (NAB) released in March the report it commissioned from professional services firm PricewaterhouseCoopers (PwC) into the loss of A$360 million (US$280 million, €224 million) in unauthorised currency option trading which the bank announced in January.
Basel urges transparency on accounting rule makers
LONDON - Global banking regulators say their counterparts in the accounting world must make their deliberations more transparent to the outside world.
HSBC's $400m regulation bill
LONDON - HSBC banking group expects the cost of regulation, which was some $400 million in 2003, to rise further as new rules such as the Basel II bank capital requirements come into force, HSBC chairman John Bond said in March.
Fed attacked for late Basel II studies
WASHINGTON - The US Federal Reserve Board released two studies in early March on the impact of the Basel II capital rules on US banking, but was criticised by one leading US lawmaker for being slow off the mark.
Malaysia warns on OTC derivatives
KUALA LUMPUR - Banks must study the Basel II upgrade of international rules for bank safety to ensure their holdings of over-the-counter (OTC) financial derivative contracts comply with risk-weighted capital charges, Malaysia's central bank governor said in February.
What they say: no duplicative supervision
On November 6, the US Securities and Exchange Commission (SEC) proposed two new rules. One concerns the supervision of investment bank holding companies (SIBHC); the other concerns the Alternative Net Capital Requirements for broker-dealers. Both would involve investment banks being supervised on a group-wide basis, and meeting Basel-style capital adequacy standards.
Capital allocation is the key to Basel II
A crucial aim of the new Basel accord is to bring a bank's regulatory and economic capital into line.In a guest article, SunGard's David Rowe, Dean Jovic and Richard Reeves explain why
Greenspan pledges level Basel-II field for smaller US banks
SAN DIEGO, California, March 18 - 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 this week.
IASB wants to make accounting rule-setting easier to follow
LONDON, March 24 - 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 today.
Caruana questions Latin America's readiness for Basel II
SANTIAGO de CHILE, March 30 - The world's top banking regulator has said 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.
UK government orders corporate governance review following Equitable Life report
LONDON, March 8 - The UK government today launched two reviews - one of corporate governance in mutual life firms and the other of the actuarial profession - as well as a study of accounting for with-profits life policies, after issuing a long-awaited report on the Equitable Life disaster.
EU plans draft Basel II directive this summer
BRUSSELS, March 15 - The European Commission said today it is committed to issuing a draft directive on the European version of the Basel II update of international rules for bank safety this summer.
Trouble looms for EU over incomplete accord
Europe's Parliament wants to examine complete capital directive. German regulators call for new impact study in G10 countries. By Melvyn Westlake
Turning the heat up on IAS
Bolkestein remarks spark fears for global accounting goal. Not everyone blames the French. By David Keefe
AIG gets to grips with Basel's thorniest unsolved issues
"National discretions" catalogue may be issued. Flexibility needed to balance interests of banks and home and host supervisors By Melvyn Westlake Interview: Nick Le Pan, head of Accord Implementation Group
Basel II agreement near on securitisation deals
Industry welcomes regulators' latest proposals for structured transactions. Concessions offered on some vexed questions
Basel II win for banks in trouble-free Nordic zone
Low risk appetite and strong regulation leave Nordic banks well placed for new accord. Timetable still tight for some supervisors
London pulls European bank supervisory body
LONDON - The new, and potentially influential, Committee of European Banking Supervisors (CEBS), which - somewhat unexpectedly - will be located in London, is set to hold its first full working meeting at the end of March.
"True" recovery for Thai banks still years away
BANGKOK - Although strong economic growth in Thailand, and buoyant capital markets will help the country's banks boost their capital, it will take another two to five good years to restore economic capital adequacy to levels that "are truly over 8%," according to bank analysts at Moody's credit rating agency.
UK presses ahead with risk-based rules for insurers
LONDON - UK regulators will continue pushing ahead in the coming year with their risk-based capital proposals for both life and general insurance sectors, covering both direct insurers and re-insurers, Britain's chief financial regulator said in January.
Israeli Basel II cost estimates
TEL AVIV - The cost of implementing the Basel II upgrade of international rules for bank safety for a large Israeli bank such as Bank Hapoalim or Bank Leumi is likely to be 3-5 million shekels ($682,000 to $1.1 million or €555,600 to €926,000),
Basel II delay threatens EU timetable, UK says
LONDON - Any delay in reaching final agreement on the Basel II accord upgrade of international rules for bank safety would threaten the already tight timetable for bringing the European version into law, the UK Financial Services Authority (FSA) said in January.
Islamic banking needs more work for Basel II
LONDON - Islamic financial experts need to do further work on the implications for Islamic banking of the risk-focused Basel II upgrade of international rules for bank safety, Malaysian central bank governor Zeti Akhtar Aziz said in mid-January.
Kamakura launches small business default model
HONOLULU - Risk management software provider Kamakura Corporation launched in January the Kamakura Risk Information Services (KRIS) Private Firm Model, a web-based browser that estimates the default probabilities of privately held firms.
IIF names regulation head
WASHINGTON - The Institute of International Finance (IIF) has appointed David Schraa as director of its banking and regulatory department.
IAIS compiles insurer governance rules
BASEL - The International Association of Insurance Supervisors (IAIS) has released a compilation of existing documents on corporate governance requirements for insurers.
FRS sells regulatory package to BNP Paribas
PARIS - Financial software firm FRS said BNP Paribas Investment Banking has selected the FRS FinancialAnalytics package for integrated regulatory reporting across the bank's European branch network.
PD product launched by CreditVantage
NEW YORK - Credit risk software provider CreditVantage in January launched the CRS corporate probability of default (PD) model which will be supplied in initially in North America with other areas to be added during the course of 2004.
CreditVantage brings out Europe loan loss database
LONDON - Credit risk software provider CreditVantage launched in January its European Loan Loss Database, an interbank database containing loan data from 1,100 borrowers in European countries.
Only half an answer to group allocation conundrum
The Basel regulators have put forward their ideas for dealing with a problem that's crucial for banks using advanced op risk approaches. But there's no end in sight
Basel Committee's four AMA principles
The group allocation paper outlines the following principles for the home-host recognition of AMA operational risk capital
Another rogue trader, another risk system failure
Scandal throws doubt on Basel-II capability of National Australia Bank. Dearth of qualified directors cited
Insurance industry braced for latest capital proposals from the EU
An imminent European Commission consultation paper will fire the Solvency II debate. Insurers get two months to comment. Worries about accounting issues likely to remain
Life assurers face big deficits under proposed capital regime
Solvency II capital rules would create a substantial capital deficit for Europe's life insurers, notably in countries with more onerous investment guarantees or higher exposure to stock markets.
First Season in the SOX League
Players aiming for the corporate governance Super Bowl need to get into training. Inspired by the New England Patriots 32-29 win over the Carolina Panthers, coach Tim Leech gives a pep talk
IASB looks for broad-based advisory group to hear critics
LONDON, February 4 - Global accounting standards setters, facing strong criticism of their new international accounting rules as they apply to banks and insurers, are considering the form, composition and mandate of a possible advisory group on the issues causing concern.
Europe signals readiness to bring Solvency II into force, despite accounting problems
BRUSSELS, February 13 - The European Commission signalled today its readiness to bring the risk-based Solvency II project for improving insurer safety into effect before controversial accounting rules for insurance companies are finalised, industry analysts said.
Bank/Securities supervisors urged to work together on trading book issues
LONDON, February 18 - Securities regulators and banking supervisors need to work together in setting capital adequacy standards for bank trading book activities, a top UK financial regulator said this week.
Basel II on target for final draft, but some issues left for later
NEW YORK, February 25 - Global banking regulators are on target to meet their goal of agreeing by the middle of this year a final draft of the complex Basel II upgrade of international rules for bank safety, the world's top banking supervisor said this week.
EU Commission monitoring insurance accounting dispute
LONDON, February 2 - The European Commission is closely monitoring the heated talks between the insurance industry and international accounting standards setters on insurance accounting, European Union internal market commissioner Frits Bolkestein said today.
Splits show as conclusive June deal in jeopardy
US regulators to sign only "conditional" Basel II. Further proposals likely after mid-year. Potential new obstacles loom By Melvyn Westlake
Op risk issues still simmering
With a consultation paper now due, Basel II's op risk group allocation problem seems likely to linger on. Expected loss debate not seen as significant By David Keefe
Heavyweights clash over "meaningless" ratios
The Federal Deposit Insurance Corporation and the Risk Management Association are going head-to-head over the value of capital ratios By Melvyn Westlake
E. Europe's born again banks glide to Basel II
Foreign ownership boosts banks in new EU states. Healthy banking emerges from the ashes of communism and crisis
IASB issues key accounting rules. Ignores EU critics
LONDON - The International Accounting Standards Board (IASB) issued revised versions in December of two controversial accounting standards dealing with financial instruments, amid speculation that the rules could lead to a clash with some European Union countries.
Better German bank supervision needed
FRANKFURT - The quality of German bank supervision and auditing receives sharp criticism from credit rating agency Standard & Poor's in its latest commentary of the country's banking industry, published in December.
Strong rebound in 2003 bank capital issuance
LONDON - The European debt markets for regulatory bank capital experienced their best year in 2003 since the boom of 2000. And 2004 could be even better, say strategists.
Another bailout for China's banks
BEIJING - The surprise element in the Chinese leadership's long expected decision to inject fresh capital into the state-owned commercial banks, is the creation of a new state company, Central Huijin Investment Co, to ensure that the latest infusion of cash is not squandered.
Tough challenges await new Taiwan regulator
TAIPEI - After repeated delays, a unified financial regulator, the Financial Supervisory Commission (FSC), is due to be created in Taiwan by mid-year 2004.
Parmalat scandal threatens Bank of Italy's powers
ROME - The Italian government was preparing, as GRR went to press, to announce regulatory reforms in reaction to the collapse of Italian dairy and food product firm Parmalat, with a hole estimated at up to €10 billion ($13 billion) in its finances.
Stop Press: Basel regulators confident of mid-year target
BASEL - Global banking regulators said as GRR went to press that they continue to make progress with the Basel II upgrade of international bank safety rules and will achieve their goal of finalising the rules by mid-year.
SunGard acquires WhiteLight Basel product
NEW YORK - SunGard Trading and Risk Systems said in January it has acquired the WhiteLight Basel II software product, and with it WhiteLight's SymphonyRPM development team.
European Banks to spend $4 billion on new accord
LONDON - Europe's banks will spend almost $4 billion on credit risk management software and services over the next two years in order to comply with Basel II regulations, according to forecasts by business information firm Datamonitor as reported by Finextra technology research.
Markets boost regulation
WASHINGTON - Financial markets appear to some degree to provide the fundamental conditions for market discipline to be effective, according to a research paper by the US Federal Deposit Insurance Corporation.
What they say: Two cheers for Madrid deal
Both the Basel Committee and the European Commission invited comments on the Madrid compromise. This concerned the treatment of expected and unexpected losses under the new Basel accord for setting bank capital levels. Fifty banks and industry associations responded by the December 31 comment deadline. Here is a summary of some of the comments
Bringing Shariah and Basel into accord
New international capital adequacy rules pose challenges for the fast developing Islamic banking industry. Can it fit into the conventional regulatory framework? David Keefe reports
In pursuit of a good match
The IASB is trying to resolve asset/liability mismatch problem arising from its insurance accounting plans. Meanwhile, a further paper on Solvency II is awaited
FSA reviewing Standard Life divergence
The UK Financial Services Authority (FSA), Britain's chief financial services watchdog, is setting up an independent review into the "significant divergence" between how Standard Life, Europe's largest mutual insurer, calculated its liabilities last year and more recently.
Will cramming for SOX 404 exams be enough to get a passing grade?
As the Parmalat scandal unfolds in Europe and external audit firms begin to define pass/fail criteria, many US listed companies may still be overly optimistic about their chances of passing their Sarbanes-Oxley section 404 exams. The consequences could be serious, says Tim Leech.
Regulators meet next week to review Basel II changes
BASEL, Switzerland, January 8 - Global banking regulators will decide next week whether any adjustments are needed to a key amendment they proposed in October to the credit risk aspects of the controversial Basel II upgrade of international rules for bank safety.
IIF wants specifics on Madrid compromise as Basel regulators meet
WASHINGTON, January 11 - Proposals by global banking regulators to drop expected losses from the credit risk capital requirements of the Basel II upgrade of bank safety rules lack specifics and need clarification on several points, an influential international banking organisation said today.
Regulators confident mid-year target for finalising Basel II
BASEL, Switzerland, January 15 - Global banking regulators said they continue to make progress with the Basel II upgrade of international bank safety rules and will achieve their goal of finalising the rules by mid-year.
Bankers hail latest Basel Committee initiatives
LONDON, January 21 - The outcome of the latest round of discussions between regulators negotiating the new international bank capital accord has been greeted enthusiastically by financial firms and organisations in Europe and the US.
Basel II delay would threaten EU timetable, UK says
LONDON, January 21 - Any delay in reaching final agreement on the Basel II accord upgrade of international rules for bank safety would threaten the already tight timetable for bringing the European version into law, the UK Financial Services Authority (FSA) said this week.
US lawmaker says more Basel II hearings likely, doubtful about the US adopting accord
Davos, Switzerland, January 25 - The US Senate Banking Committee will have to revisit the Basel II bank capital proposals, committee chairman Richard Selby has said. He also expressed serious reservations about whether the US could ever adopt Basel II, the UK Independent newspaper reported over the weekend.
UK presses ahead with risk-based rules for insurers
LONDON, January 27 - UK regulators will continue pushing ahead in the coming year with their risk-based capital proposals for both life and general insurance sectors, covering both direct insurers and re-insurers, Britain's chief financial regulator said today.
Basel regulators issue papers on UL, securitisation and op risk group allocation
BASEL, Switzerland, January 30 - Global banking regulators today issued planned papers on the treatment of expected losses and of securitisation in the credit risk aspects of the Basel II upgrade of international rules for bank safety, and on the group allocation problem in operational risk.
New EU body to drive fair capital rules
Powerful bank supervisors' committee to ensure consistent implementation. Battle over location By Melvyn Westlake
Arbitrage fears grow
A delay in developing an accounting rule for insurance contracts could have knock-on effects for European rules
EU-Basel gap emerging over investment firms?
Officials at the Brussels Commission are "pressing" the Basel Committee to make changes to trading book rules By Melvyn Westlake
Double-entry dialogue
The first tripartite meeting on accounting rules between banks, regulators and accounting standards setters has got talks off to a good start. More discussions are planned
Crisis-racked Turkish banks ponder Basel II
Bankers and regulators produce road map to reach new capital accord. But banks still fragile despite regulatory reform
What they say: US industry reactions to ANPR
Over 100 banks and other bodies and individuals responded to the US regulators' Advanced Notice of Proposed Rulemaking before the November 3 comment deadline. This is the key first step to implementing Basel II in America. Some of the public comments are summarised below
US Congress poses new threat to Basel II
LONDON - Regulators on both sides of the Atlantic are anxiously trying to assess moves by US lawmakers that could pose a serious new threat to the Basel capital accord, which is aimed at boosting the future safety of banks around the world.
Recovery sighted for Japan's mega banks
TOKYO - The painfully slow rehabilitation of Japan's major banks appears to have picked up pace this year. Financial results for the six months to end-September display marked improvements in capital adequacy ratios, declines in non-performing loans and a substantial profits recovery.
Gap between large, small US? banks to widen under Basel II
NEW YORK - The decision by US regulators to only apply the New Basel Capital Accord to the country's largest banks will increase the growing separation between this group and America's more numerous small banks, according to a report prepared by Mercer Oliver Wyman, a financial services strategy and consulting firm.
Sanio doubts pillar 3 for Solvency II/Basel II
BRUSSELS - Germany's top financial regulator wants a rapid legislative passage for the planned risk-based Solvency II rules for the safety of Europe's insurance industry.
Ferguson optimistic on Basel II timetable
GENEVA - US Federal Reserve Board vice chairman Roger Ferguson reiterated in early December his optimism that the Basel II update of international rules for bank safety "will emerge from the Basel Committee in a timely fashion, so that national procedures can go forward."
Regulation will be big driver behind M&A wave
LONDON - Regulatory restrictions will be the main driver of restructuring in the finance industry over the next five years, according to 29% of financial service industry executives recently surveyed.
US regulators dispute FDIC report on Basel II
WASHINGTON - A dispute between US banking regulators broke out as Global Risk Regulator went to press about a report by one of their number that queries the efficacy of the Basel II proposals for upgrading bank safety.
UK Treasury consults on Cad 3
LONDON - The UK Treasury issued a consultation paper in early December seeking the banking and investment industry's views on the European version of the complex Basel II update of international rules for bank safety.
Singapore lessons for Solvency II
SINGAPORE - Regulators in the city- state plan to extend new valuation rules for insurance liabilities to the life insurance business under their proposals for a risk-based capital regime for insurers.
Swimming in alphabet soup
The knock-on effects of a delay in agreeing new accounting rules for insurance contracts could be far reaching and create opportunities for regulatory arbitrage. David Keefe reports
Regulators fear accounting mismatch
More than 130 insurance firms, accounting bodies and other interested parties provided responses to the International Accounting Standards Board's exposure draft (ED 5) on insurance contracts Here's a selection of regulators' comments
US Insurers call for federal regulation
The state-based regulation of the US insurance industry is under fire. Insurers want the option of federal supervision. Here's a summary of the testimony at November's House hearings
A new round of reforms
Australia's supervisors are building on the lessons of HIH's collapse to make the insurance industry safer
New audit regulator has a mandate - now it must start listening
The PCAOB received 183 responses to its exposure draft on Sarbanes-Oxley audit standards, by the November 21 comment deadline. Many respondents strongly dispute the Board's thinking and challenge its fundamental premises, says Bruce McCuaig.
EU Commission wants views on Basel-II lessons for Solvency II
BRUSSELS, December 1 - The European Commission would like to hear from European Union member states how they think lessons from the Basel II upgrade of bank safety rules might be applied to the development of Solvency II rules for Europe's insurance industry.
Correction - EU Commission wants views on Basel-II lessons
FDIC says Basel II would weaken current US capital rules
WASHINGTON, December 8 - US banking supervisors will have to choose between ignoring the output of the formulae in the Basel II international capital rules for bank safety, or significantly weakening current US capital rules, according to a federal banking regulator.
Ferguson reiterates optimism on Basel II timetable
GENEVA, December 11- US Federal Reserve Board vice chairman Roger Ferguson reiterated in early December his optimism that the Basel II update of international rules for bank safety "will emerge from the Basel Committee in a timely fashion, so that national procedures can go forward."
US Comptroller Hawke warns on Basel II task and unforeseen issues
BERLIN, December 16 - A leading US banking supervisor warned this week that "there is a staggering amount of work" to be done on the Basel II upgrade of bank safety rules and that more unforeseen issues could emerge.
IASB issues key financial accounting rules, despite fears of European critics
LONDON, December 17 - The International Accounting Standards Board (IASB) today issued revised versions of two controversial accounting standards dealing with financial instruments, amid speculation that the rules could lead to a clash with some European Union countries.
IASB drops exemption time limit on insurance contracts, still studying mismatch problem
LONDON, December 22 - The International Accounting Standards Board (IASB) has agreed to remove the time limit on a key exemption for insurance companies because of the delay in developing a new accounting rule for measuring the value of insurance contracts.
Comments on Basel II compromise broadly favourable
LONDON, December 30 - The limited number of responses to the October agreement that helped put the controversial Basel II upgrade of bank safety rules back on track, seem broadly favourable while raising some technical concerns, according to regulatory sources.
Skilful compromise puts Basel II back on track
Regulators agree Madrid proposals provide way forward. Bankers want more changes. Opposition to accord abates in US. By Melvyn Westlake
Ripples spread from vexed op risk problem
A solution could set a pattern for full credit risk models, but is likely to be headache for EU lawmakers, reports David Keefe
Ambitious drive to reach Basel 1.5 capital rules
China has not "rejected" Basel II. Full compliance with new accord still long-term goal. Tough new capital adequacy rules for Chinese banks coming soon. By Melvyn Westlake Interview: Liu Mingkang, China's chief bank regulator
German banks clamour for IRB despite troubles
Signs that banking system is emerging from worst period. Some 576 banks said to want sophisticated risk capital models
FSA unveils financial conglomerates rules
LONDON - New rules aimed at ensuring that financial conglomerates hold sufficient capital on a group-wide basis were proposed in late October by the Financial Services Authority (FSA), Britain's regulator.
SE Asian nations urged to get ready for Basel II
BALI, Indonesia - South-East Asia nations need to harmonise institutional structures, skills and regulations to face the Basel II upgrade of international capital rules for bank safety, Bank Indonesia governor Burhanuddin Abdullah said in October.
First glimmer of hope for Japanese banks
TOKYO - There are tentative signs that the big Japanese banks are starting to make some headway in reducing the huge level of bad debts on their books.
Thai banks ready to adopt Basel II
BANGKOK - Thai commercial banks will be ready to adopt the Basel II upgrade of bank capital adequacy rules when they come into force at end-2006, Bank of Thailand Governor Pridiyathorn Devakula said in late October.
Strong attack on EU rules for supervising banks
LONDON - An unusually strong attack has been made on a key part of the new Basel capital accord by European banking representatives.
On the move
BASEL - Ryozo Himino, previously director of international regulatory policies at the Japanese Financial Services Agency (JFSA), became secretary general of the Basel Committee on Banking Supervision on November 1.
Regulators want more talks with accounting bodies
NEW YORK - Global banking regulators want more talks on issues of mutual concern with accounting-setting bodies and private sector accounting professionals, Basel Committee chairman Jaime Caruana said in October.
Regulators ready to work on credit risk models for Basel III
LONDON - Global banking regulators are ready to start work as soon as possible on the possibility of incorporating full credit risk models in the Basel Accord capital rules for bank safety, Basel Committee chairman Jaime Caruana said in early October.
Oversight and disclosure are biggest benefits
LONDON -- Enhanced supervisory oversight and stronger market discipline through greater information disclosure should in time be the real benefits of the new Basel capital accord.
UBS heads risk disclosure league
HELSINKI - Swiss bank UBS is top of the European league table for bank disclosure of information about the risks involved in their operations, according to a new survey. The bank risk disclosure survey, carried out by Helsinki-based Stradea Consulting, covered 35 banks in 13 Western European countries.
To the letter, but not the spirit
UK insurance companies have improved their risk management, but some still don't see it as a core requirement and many haven't clearly defined their appetite for risk
IASB to meet on insurance standard delay
The International Accounting Standards Board (IASB) will consider its options at a mid November meeting now that the chances of having a fair value standard for insurance contracts ready for 2007 have virtually evaporated, IASB officials say.
Health liabilities add to emerging risks concern
The expanding liability for health risks is one of the trends behind growing concern about the ever-increasing exposure to emerging risks that's proving a challenging task for insurers, the Organisation for Economic Co-operation and Development (OECD) said in October.
What they say: industry views on EU capital rules
European Commission's latest capital adequacy proposals for banks and investment firms - the third Consultative Paper - attracted many comment letters by the October 22 deadline. The proposals will form the basis of the risk-based capital directive, the EU's version of Basel II. Here's a summary of some of the comments.
IT's best practice
As financial firms adjust to a seismic shift in the way they are regulated, how do they manage the impact?
Algorithmics launches new Basel II product
TORONTO - Algorithmics, Canadian provider of enterprise-wide risk management software, said it launched an enhanced package in its latest version of Algo Suite 4.4 to support data consolidation, calculations and reporting needed under the Basel II upgrade of capital rules for bank safety.
SunGard Trading links with Raft on op risk product
NEW YORK - SunGard Trading and Risk Systems announced in October a partnership with financial software provider Raft International to deliver an operational risk management product.
Hidden shoals for the unwary
Hazards to navigation abound in the Sarbanes-Oxley Act. Tim Leech plots a course
Supervisors refining pillar 3 rules to ensure level playing field
CHICAGO, November 3 - Global banking regulators are refining the information disclosure aspects of the Basel II update of capital rules for bank safety so that they ensure a more level playing field without being overly burdensome, Basel Committee chairman Jaime Caruana said over the weekend.
US regulators studying seriously House Committee views on Basel II
BRUSSELS, November 13 - US banking supervisors will look very seriously at a letter sent to them by US House Financial Services Committee members last week urging a cautious stance on the Basel II upgrade of international capital rules for bank safety, US Federal Reserve Board vice chairman Roger Ferguson said today.
Basel II back on track, but US uncertainties remain
BRUSSELS, November 15 - "Back on track" was the public theme of a major conference in Brussels last week on the controversial Basel II upgrade of international rules for bank safety.
Insurance accounting rule delay confirmed, Solvency II timetable threatened
LONDON, November 19 - A key accounting standard on valuing insurance contracts won't now come into force before mid-2008, an 18-month delay that threatens the timetable for European plans for risk-based regulation of insurance companies.
US regulator urges Basel II dialogue with Congress
LONDON, November 17 - The concerns of US lawmakers about aspects of the controversial Basel II upgrade of international rules for bank safety clearly indicate the need for continued dialogue between US banking supervisors and Congress, a senior US regulator said today.
Singapore, Australia push new rules for insurers
SINGAPORE, November 28 - Singapore and Australia both published proposals on the risk-based supervision of insurance firms this month.
Regulators in urgent quest to fix Basel II row
German, US spat ahead of critical Basel Committee meeting in Madrid. Several compromises under scrutiny. By Melvyn Westlake
Give us accord certainty, bankers plead
Banks accept delays, but they want the Basel Committee to get a firm grip on the situation, David Keefe reports
Group allocation: the other Basel II problem
Bankers fear the home/host issues raised by the advanced approaches to operational risk could lead to a mess
SEC sets Basel rules for US investment firms
Time running out for US investment firms to meet European demands on group-wide supervision. New rules published
Basel II out of reach as China strives for reform
No "rejection" of new accord. It remains long-term aspiration. Reform drive to restore banking sector solvency is priority. By Melvyn Westlake
Three-way talks to boost coherence over bank capital and accounting rules
LONDON - Bankers, regulators and accounting standards setters have agreed to start a formal three-way dialogue to try and achieve greater consistency between the regulatory capital rules and the accounting framework for banks.
IMF seeks beefed up supervision for insurers
WASHINGTON - A call for a stronger supervisory focus on insurers' financial risks is made by the International Monetary Fund in its latest Global Financial Stability Report (GFSR).
Regulators turn to network theory to study linkages
SINGAPORE - Financial regulators are looking more closely at the links within and between firms under their supervision, reflecting a growing awareness of the importance of network theory in analysing risk in the financial system, a senior Singapore regulator said in September.
Insurance supervision at crossroads
SINGAPORE - The insurance industry worldwide stands at the regulatory crossroads with past failures emphasising the need for enhanced and harmonised supervision, the world's insurance supervisors were told in early October.
Insurance supervisors adopt revised core principles
SINGAPORE - The world's insurance regulators adopted an expanded version of their core principles for the supervision of the insurance industry at their annual conference in Singapore in early October.
IAIS insurance glossary
BASEL, Switzerland - The International Association of Insurance Supervisors (IAIS) issued a glossary of insurance terms in September to help improve supervision of the insurance industry at the domestic and international level.
Getting Basel II right more important than timetable
DUBAI - Basel Committee chairman Jaime Caruana said in late September that getting the controversial Basel II upgrade of capital rules for bank safety right is more important than sticking to a timetable, Reuters news agency reports.
Hong Kong formalises regulator links
HONG KONG - Banking and insurance supervisors formalised the way they already co-operate in a memorandum of understanding they signed in September, Hong Kong officials say.
Task force on reinsurance transparency reports next year
BASEL - A task force working on improving the transparency of the reinsurance industry hopes to issue its conclusions next year, officials with the International Association of Insurance Supervisors (IAIS) said in early October.
Accounting delays pose problems for Solvency II
Accounting standard setters aren't going to meet their 2007 target for a rule on insurance contracts. David Keefe looks at what that means for Europe's Solvency II project
Liability best estimates could skirt accounting problem
The European Commission may need to think of developing some quantitative measures to allow the development together of international insurance accounting standards and the Solvency II regime, without the one hindering the other.
Model approach to industry's future
Allianz isn't waiting for the regulators - it's forging ahead with its own plans, using a risk model that mirrors the three pillars of Basel II
Singapore lures niche insurers
Niche insurance firms should be especially attracted to Singapore by the lower minimum capital requirements resulting from the city state's risk-based supervision policies, Singapore deputy prime minister Lee Hsien Loong said in early October.
What they say: On Sarbanes-Oxley's first year
The US Senate Banking Committee has held 3 hearings into the implementation of the 2002 Sarbanes-Oxley Act, which is intended to re-establish investor confidence in the integrity of company disclosures and financial reporting after the corporate scandals of recent years. The hearings, held on September 9 and 23, and October 2 received testimony from regulators, accountants and corporate executives, as well as investor and industry associations and the administrator of the world's largest retirement scheme. Here is a summary of what they said.
Basel II vs. Sarbanes-Oxley: which wins?
Tim Leech compares the corporate governance provisions of the Basel II bank accord and the US Sarbanes-Oxley Act and applies seven tests of effectiveness
The other Basel II problem: group allocation
LONDON, October 3 - Global banking regulators believe collaboration between national banking supervisors should help resolve the so-called group allocation problem in the operational risk provisions of the controversial Basel II upgrade of international capital rules for bank safety.
Regulators ready to work on credit risk models for Basel III
LONDON, October 9 - Global banking regulators are ready to start work as soon as possible on the possibility of incorporating full credit risk models in the Basel Accord capital rules for bank safety, Basel Committee chairman Jaime Caruana said today.
Basel II chief says improvements possible without opening big issues
LONDON, October 9 - Global banking regulators could improve on the present situation with the Basel II upgrade of international capital rules for bank safety without opening up other big issues, Basel Committee chairman Jaime Caruana said today in reply to reporters' questions.
Regulators say Basel II compromise strengthens accord
MADRID, October 11 - The compromise reached by global banking regulators on the vexed question of unexpected losses improves the Basel II upgrade of capital rules for bank safety and keeps Basel II on track, regulatory sources said today.
Clever Basel II compromise gets wide support
LONDON, October 13 -- The weekend compromise deal in Madrid to rescue the proposed Basel capital accord on bank safety was warmly welcomed across much of Europe today.
Australian bankers welcome Basel II compromise
SYDNEY, Australia, October 13 - The compromise on unexpected losses reached by global banking regulators over the weekend looks like a neat solution to an issue that threatened serious delays to the Basel II upgrade of capital rules for bank safety, Australian banks and regulatory sources said today.
IIF says more work needed on Basel II
WASHINGTON, October 15 - More work is needed in other areas of the Basel II upgrade of international capital rules for bank safety following the weekend compromise on the unexpected losses issue, the influential Institute of International Finance (IIF) said today.
EU-US Sarbanes-Oxley audit talks end without agreement
WASHINGTON, October 15 - Meetings between European Union and US officials over controversial US plans to make European auditing firms register with US regulators ended without an expected agreement today.
European regulators reflect on Basel II compromise ahead of Cad 3 deadline
BRUSSELS, October 21 - European bankers and their supervisors will be studying in coming weeks the implications of the recent Basel II compromise for banks using the simpler standardised approach to assessing credit risk.
No complete answer likely to op risk allocation problem, says Caruana
PARIS, October 26 - There may not be a completely satisfactory answer to the cross-border regulatory issues raised by the operational risk allocation problem in the Basel II upgrade of capital rules for bank safety, Basel Committee chairman Jaime Caruana said at the end of last week.
Bank directors must oversee compliance risk management
BASEL, October 27 - Bank directors must oversee management of a bank's compliance risk - the risk of sanctions, financial loss or damage to its reputation that a bank may suffer by failing to comply with laws, rules and standards.
Strong attack on EU rules for supervising banks
LONDON, October 27 - An unusually strong attack has been made on a key part of the new Basel capital accord by European banking representatives. The attack has come in a paper sent by the British Bankers' Association (BBA) to the European Commission in Brussels, which is preparing to introduce its version of the Basel capital accord into European Union law.
Basel regulators want more talks with accounting bodies
NEW YORK, October 28 - Global banking regulators want more talks on issues of mutual concern with accounting-setting bodies and private sector accounting professionals, Basel Committee chairman Jaime Caruana said yesterday.
Technical experts prepare joint paper on op risk allocation problem
LONDON, October 29 - Two groups of technical experts with the Basel Committee of banking supervisors are preparing a joint paper on the options for resolving the thorny group allocation problem in the operational risk aspects of the Basel II upgrade of capital rules for bank safety.
FSA unveils financial conglomerates rules
LONDON, October 22 - New rules aimed at ensuring that financial conglomerates hold sufficient capital on a group-wide basis are proposed today by the Financial Services Authority (FSA), Britain's regulator.
Basel chief is confident of Basel II deadlines
PARIS, October 24 - Basel Committee chairman Jaime Caruana remains confident that the end-2006 deadline for implementing the Basel II upgrade of capital rules for bank safety can be met following the compromise on the unexpected loss issue reached two weeks ago in Madrid.
US regulators seek major revamp of Basel II
Definition of capital to be challenged at key meeting. Banks want expected losses to be dropped from the accord. By Melvyn Westlake
Insurance world fatally split
The insurance industry's lack of a unified voice weakens its case against new international accounting standards, reports David Keefe
Recipe for trouble in the US
Fears that Washington's decision on Basel II compliance will create unlevel playing field. Potential backlash threat. Question mark over foreign banks in the US Interview:Jan Sijbrand co-head of group risk management at ABN AMRO Bank
What they say: CP3 comments roundup
The Basel Committee's third Consultative Paper(CP3) prompted some 200 responses, including comments from banks, trade organisations, national supervisors, academics, insurance firms and credit-rating agencies. Here is a summary of what they say.
Revealed: the ten US mandatory Basel II banks
WASHINGTON - US bank regulators have been oddly coy over naming the ten "internationally active" banks that they will require to comply with the New Basel Capital Accord when it eventually comes into effect. The reason for this coyness is, they say, that the list could change between now and the final Basel II start date.
Understanding for China's "no" decision on Basel II
BASEL - China's decision not to adopt the New Basel Capital Accord, for at least some years, is being accepted philosophically by officials at the Basel Committee, author of the new capital adequacy rules aimed at underpinning the world's banking system.
Capital drops could lead to credit downgrades
NEW YORK - Banks have been warned by credit ratings agency Standard & Poor's that if they substantially reduce their capital levels on the basis of the new Basel II accord methodology, they risk being downgraded if the agency does not approve.
Op risk insurance would be "prohibitively expensive"
BASEL - The insurance industry currently has little appetite for developing new products to cover operational risk, the Joint Forum of banking, insurance and securities supervisors says in a report issued in August.*
Belgian supervision seen as European model
BRUSSELS - Belgium's "intermediate model" of financial supervision could be a pattern for any future arrangements at a European level, National Bank of Belgium governor Guy Quaden said in late July.
Low-risk US banks may not gain from Basel II
WASHINGTON - Low risk banks in the US are unlikely to benefit under the New Basel Capital Accord, and the country's high-risk banks might not be penalised.
Caruana says Basel II should smooth economic cycles
BASEL - New capital rules for banks worldwide should smooth economic swings and strengthen the financial system, making it easier for central bankers to set interest rates, the head of the Basel Committee said as Global Risk Regulator went to press.
To forgive is divine
New York - Goldman Sachs regards as "water under the bridge" the mistake by Basel Committee staff of publishing to the world the US investment bank's confidential comments on the third consultative paper (CP 3) on the Basel II capital accord.
Regulators name Basel II Home/Host principles
BASEL - The new Basel accord on bank safety - Basel II - won't change the legal responsibilities of national supervisors for the regulation of their domestic banks. Nor will it alter the arrangements for consolidated supervision already in place, the Basel Committee on Banking Supervision said in August.
Support for Pillar-2 treatment of interest rate risk
BASEL, Switzerland - Global banking regulators stress that banks must hold capital to match the level of interest rate risk they undertake and provide public information on their interest risk levels and management.
India looks for flexibility
Reform-minded central bank bides its time over Basel II, while banks get ready to comply By Melvyn Westlake
Hopelessly divided over accounting policies
The insurance industry's lack of a unified voice weakens its case against the new international accounting standards
Risk-based capital rules for UK life insurers
New capital rules for a UK speciality - with-profits policies - are likely to reinforce the decline in the market
Australian insurers must improve risk management
Australia's general insurance companies must further improve their governance and risk management practices, a senior Australian supervisor said in August.
White lies and legal risk
The SEC's interpretation of the Sarbanes-Oxley Act requires that criteria be used when judging the effectiveness of a firm's controls - which is good news for lawyers, says Tim Leech.
Basel paper supports pillar-2 treatment of interest rate risk
BASEL, Switzerland, September 6 - Global banking regulators stressed today that banks must hold capital to match the level of interest rate risk they undertake and provide public information on their interest risk levels and management.
Basel II may be delayed a year - Duisenberg
BRUSSELS, September 10 - Implementation of the Basel II upgrade of international capital rules for bank safety may be delayed by as much as a year as some commercial banks continue to have concerns, European Central Bank president Wim Duisenberg said today.
Mixed reactions to reported Basel II delay
LONDON, September 10 - Bankers' immediate reactions were mixed to reports that the controversial Basel II upgrade of international capital rules for bank safety is to be delayed yet again by up to a year.
Basel Committee has made no decision to delay Basel II
LONDON, September 11 - Global banking regulators have yet to decide whether a delay is necessary in the timetable for implementing the controversial Basel II upgrade of capital rules for bank safety, international regulatory sources said today.
Reticent experts prepare Basel II report
LONDON, September 12 - Basel Committee technical experts will now prepare a report for the Committee on what, if any, changes might be needed to the controversial Basel II upgrade of bank capital adequacy in the light of banking industry comment.
Three-way talks to boost coherence over bank capital and accounting rules
LONDON, September 17 - Bankers, regulators and accounting standards setters have agreed to start a formal three-way dialogue to try and achieve greater consistency between the regulatory capital rules and the accounting framework for banks. The first meeting of the three groups will be held "within the next few weeks."
Isda takes pragmatic view of any Basel II delay
LONDON, September 18 - A leading derivatives trade association takes a pragmatic view of an expected delay in the coming-into-force of the controversial Basel II upgrade of international capital rules for banking safety.
Caruana says getting Basel II right more important than timetable
DUBAI, September 21 - Basel Committee chairman Jaime Caruana said today that getting the controversial Basel II upgrade of capital rules for bank safety right is more important than sticking to a timetable, Reuters news agency reports.
Basel experts wrestle with op risk capital allocation problem
LONDON, September 24 - Technical experts with global banking regulators meet this week to decide their position on yet another issue that some bankers believe could throw an obstacle in the path of the controversial Basel II upgrade of the international capital rules for bank safety.
Europe formally adopts new accounting rules
BRUSSELS, September 30 - The European Commission confirmed today its adoption of contentious new fair-value international accounting rules that will help underpin the risk-based supervision of banks, insurance companies and investment firms in the European Union.
Delay to final Basel II accord "inevitable"
US rulemaking enters intense period of debate. Pressures on regulators for concessions. But accord backed "on balance" By Melvyn Westlake
Banks worried by EU op risk concession to investment firms
Europe's version of Basel II relaxes demands on investment firms, but banks fear unlevel playing field, reports David Keefe
Waiting on Solvency II
The UK wants risk-based capital rules to make insurance companies safer, but it will have to fit in with Europe's plans
Hearings roundup: shoot out on the Hill
The Basel II capital accord was the subject of hearings by both the Senate Banking Committee, on June 18, and the House Financial Institutions sub-Committee, on the following day. Here's a summary of some of the prepared testimonies.
Pillar 2 fears emerge as deadline nears
BASEL - "It's flawed, it's too expensive, it's too complex - but we can live with it," says one banking source of the Basel II capital accord on bank safety as the July 31 deadline for comment on CP 3, the final consultation paper on the accord, approaches.
UK wants Basel II IRB approach available to all
LONDON - UK regulators believe the more complex approaches to assessing credit risk under the proposed Basel II minimum capital rules for bank safety should be available to all banks, regardless of size.
PwC to conduct major EU impact study
BRUSSELS - PricewaterhouseCoopers, the international professional services organisation, is undertaking a study into the impact of the proposed Basel II capital accord on banks and investment firm in the European Union.
Bad Indian bank loans are twice reported level
NEW DELHI - The level of bad loans in India's banking system is nearly twice as high as officially reported, according to a study by the country's largest credit rating agency. This raises questions about the capital adequacy of some banks, say analysts.
Japan banks left in limbo until 2004
TOKYO - The Financial Services Agency, Japan's bank regulator, is strongly denying that action to deal with the poor quality of its banks' capital is about to be postponed again.
Australia's big four won't gain much from Basel II
SYDNEY, Australia - Australia's largest banks won't gain significant advantages over smaller rivals via the complex Basel II minimum capital rules for bank safety, the country's banking supervisors said in late June.
Complex firms pose new challenges for regulators
BASEL - Financial systems with alternative channels of funding pose new challenges for financial supervisors because of the greater complexity of financial firms and the intensified relations between firms and markets, the Bank for International Settlements (BIS) says.
Market discipline breeds safer banks, says study
LONDON - The soundness of the banking system can be better safeguarded by strengthening market discipline, according to new research at the Bank of England.
HK ready for Basel II
HONG KONG - Banking in Hong Kong won't see any dramatic changes overnight with the adoption of the risk-based Basel II capital rules for bank safety, but there will be some re-focusing of how risks within banks are addressed, both by banks and supervisors, a senior regulator said in early July.
France's Trichet chairs G 10 central bank chiefs
BASEL - The central bank governors of the Group of 10 (G 10) leading economies elected as their chairman at the end of June Bank of France governor Jean-Claude Trichet.
Unregulated insurers blur extent of risk transfer
SINGAPORE - Financial regulators don't know precisely how much risk has been transferred via credit derivatives, for instance, to insurance companies because some of the world's largest insurers are unregulated, a senior Singapore supervisor said in late June.
Singapore banks face unique dilemma
Shareholder value and increasing competition are headaches for Singapore's capital-rich banks. But they show Asia the way over new Basel accord
The accountancy-Basel nexus
Banks can save money if they watch for the links between Basel II and the new international accounting rules, says Stephen Kemp
IAS Unstoppable
Political rows notwithstanding, the new international accounting standards are on their way - and they're intimately linked to regimes like Basel II and Solvency II By David Keefe
Where will the cops set the real limits?
Traffic police tolerate a certain amount of excessive speeding, otherwise most car drivers and police would spend half their lives in court. Tim Leech looks at how much leeway companies might be allowed under Sarbanes-Oxley.
US sets November deadline for Basel II comment
WASHINGTON, August 4 - The deadline for industry comment on US plans to implement the controversial Basel II capital rules for bank safety will be November 3, US banking supervisors said in a joint statement.
UK banks want flexible approach to Basel II
LONDON, August 7 -UK banks want a flexible approach to the practical problem facing some banks wanting to adopt advanced methods of assessing credit risk under the complex Basel II capital rules for bank safety, British Bankers' Association (BBA) officials said today.
Op risk insurance would be "prohibitively expensive"
BASEL, Switzerland, August 11 - The insurance industry currently has little appetite for developing new products to cover operational risk, the Joint Forum of banking, insurance and securities supervisors says in a report issued today.
Low-risk US banks may not gain from Basel II
WASHINGTON August 15th - Low risk banks in the US are unlikely to benefit under the New Basel Capital Accord, and the country's high-risk banks might not be penalised.
Understanding for China's "no" decision on new capital accord
BASEL August 19th - China's decision not to adopt the New Basel Capital Accord for at least some years, is being accepted philosophically by officials at the Basel Committee, author of the new capital adequacy rules aimed at underpinning the world's banking system.
Basel CP3 responses reflect fears of higher charges, complexity and pillar 2 concerns
BASEL, Switzerland, August 20 - Fears of excessive capital charges, worries about complexity and cost and how supervisory review will work, plus highly technical arguments about securitisation, credit derivatives and other complex issues.
Pillar 3 discipline seen working for subordinated debt
BASEL, Switzerland, August 28 - Major banks issue subordinated debt with sufficient frequency and in sufficient amounts to create the conditions for direct market discipline - a key concept behind the Basel II update of capital rules for bank safety.
UK plans risk-based capital rules for life insurers
LONDON, August 29 - UK regulators plan new risk-focused rules to determine how much capital life insurance companies should hold to ensure they can meet their liabilities to policyholders.
EU Basel II paper confirms capital concessions to investment firms
BRUSSELS, July 1 - The European Commission confirmed today it proposes that certain types of lower risk investment firm can keep to current rules for calculating protective capital rather than adopting the Basel II capital rules.
UK wants Basel II IRB approach available to all banks
LONDON, July 8 - UK regulators believe the more complex approaches to assessing credit risk under the proposed Basel II minimum capital rules for bank safety should be available to all banks, regardless of size.
New US bank capital rules get first preview on Friday
WASHINGTON, July 9 -- The process of getting the new capital adequacy regime for international banks adopted in the US reaches a key stage on Friday when the country's four leading bank regulators will jointly issue their Advanced Notice of Proposed Rulemaking (ANPR).
UK watchdog warns on interest conflicts at investment banks
LONDON, July 17 - Investment banks in London have had management structures which, at the very least, leave them open to the charge that they don't handle conflicts of interest in the way their customers would hope, Britain's chief financial regulator said today.
UK firms challenged by operational risk regime
LONDON, July 22 - Many financial firms in the UK face a significant challenge in deciding how to respond to the new regulatory regime on operational risk due to come into force in September 2004, the Financial Services Authority (FSA) said today.
UK plans risk-based capital rules to cut insurance failures
LONDON, July 15 - UK regulators plan to bring general, or non-life, insurance companies under a new risk-based capital regime to help head off future failures in the sector, the Financial Services Authority (FSA) said today.
US issues notice of Basel II plans
WASHINGTON, July 11 - US banking supervisors today jointly gave formal notice of their proposals for implementing in the US the controversial Basel II capital rules for bank safety, with a comment period that threatens the timetable for issuing the final version of the Basel II rules.
Comment deadline on Basel II closes today
BASEL, Switzerland, July 31 - The deadline closes today for comment on the third consultation paper on the controversial Basel II capital rules on bank safety with global banking regulators still officially aiming to have the final version of the rules out by the end of the year, despite acknowlged pressures on the timetable.
Good news, bad news from the EU Commission
Satisfaction and dismay likely to greet Europe's impending capital adequacy proposals. Op risk insurance to be restricted By David Keefe
Basel II under fire on both sides of Atlantic
US Senate and House hearings provide platform for Accord critics. Europe's shadow regulatory panel fears perverse results By Melvyn Westlake
Basel II spurring market creativity?
Are covered bonds in Britain the first sign of changing investor behaviour? FSA mulls capital charge for new securities
Impressive progress, but doubts remain
The New York conference called by the Basel regulators on advanced op risk approaches underlined the gains made, but left some familiar questions open Reports David Keefe
After Resona: Japan banks feel shock waves
By Melvyn Westlake Declining capital ratios put more banks at risk. Nationalisation fears grow. Government gropes for re-capitalisation route
Abbey National buys Raft op risk software
LONDON - Software provider Raft International said in May that UK banking group Abbey National has chosen its Raft Radar product to manage the bank's operational risk.
Pillar 2 still a mystery to many banks
LONDON - A veil of uncertainty still surrounds Pillar 2 of the proposed Basel capital accord.
NY Fed to take lead role says McDonough in swansong
NEW YORK - William McDonough's last message as president of the New York Federal Reserve Bank said the Bank plans "as a special area of emphasis" to lead the task of appraising how risks are measured, managed and controlled and how banking, securities and insurance risks can be tackled in a common framework.
Business Objects/FRS aim to reduce Basel II compliance costs
SAN JOSE, California - US business intelligence software firm Business Objects said in June it has signed an original equipment manufacturer (OEM) agreement with FRS to help banks reduce the time and cost of complying with the Basel II bank minimum capital regime.
Basel II shakeup to create many winners and losers
LONDON - Banks in the United Kingdom, France, Switzerland and the Nordic region look likely to be among the winners under the proposed New Basel Capital Accord. By contrast, banks in Italy, Germany and the Benelux countries could be among the losers, according to a new study published in June.
No "best" way to validate internal credit ratings
LONDON - There's no single "best" way to validate the internal credit ratings required of banks by the more advanced risk measurement approaches under the Basel II minimum capital rules for bank safety, according to British Bankers' Association (BBA) chief executive Ian Mullen.
Solvency II insurance paper postponed
BRUSSELS- European Commission officials say publication of a staff paper on the organisation of work on the Solvency II project for risk-based rules on insurance company safety has been postponed until after the early-July review by the European parliament of the so-called Lamfalussy process.
US urges foreign banks to make Basel II concerns known
NEW YORK - US subsidiaries of foreign banks were urged by a senior US banking regulator to let both their US and home country supervisors know of any problems the US application of the Basel II capital rules might cause them.
OECD urges sound corporate governance for Asian banks
PARIS - Regulators in Asian countries need to promote sound corporate-governance practices in their banking sectors to help restore confidence in the region's debt and share markets, says the Organisation for Economic Co-operation and Development (OECD).
US insurers oppose new accounting rules
A group of US insurance firms convened by American International Group (AIG), the world's largest insurer, plans to state in early July its objections as a group to the accounting reforms proposed by the International Accounting Standards Board (page 18).
South Africa aims to be ready on the night
Risk-based supervision in place for some years. Major banks investing heavily in risk management systems
Supervisors want joint effort on new accounting rules
IAIS's new secretary general explains why regulators are worried about treatment that ignores the close asset/liability link in insurance Interview by David Keefe Interview: Yoshihiro Kawai, the new secretary general of the IAIS
Look before you leap
Urgent changes are needed in the way the Sarbanes-Oxley Act is being interpreted, if it is not to cost more than it's worth and fail in its purpose, says Tim Leech.
Optimum Risk Decisions
Striking a balance between returns and their accompanying risks is at the heart of good decision making. Triphonas Kyriakis explores the models, mixes and time periods available
Fed's Ferguson reiterates Basel II advice to foreign banks
NEW YORK, June 17 - US regulators will work with the accord implementation group (AIG) of the Basel Committee to minimise any problems arising for foreign banks from US policy on the Basel II minimum capital rules on bank safety, US Federal Reserve Board vice chairman Roger Ferguson said today.
Sarbanes-Oxley is a wake up call for banks, says Fed's Bies
WASHINGTON, June 11 - The US Sarbanes-Oxley Act on corporate governance is a wake up call for everyone involved in designing and testing a system of internal controls, US Federal Reserve Board governor Susan Bies said today.
Europe drops wider role for op risk insurance, relieves some investment firms from op risk charge
LONDON, June 5 - European regulators have dropped the idea of allowing banks a wider use of operational risk insurance to reduce op risk capital charges in the European version of the complex Basel II rules on bank protective capital.
UK says Basel II home/host talks with US are fruitful, but warns of difficulties
LONDON, June 12 - UK regulators are in fruitful talks with their US counterparts on the so-called home/host issues raised by the complex Basel II bank minimum capital rules that are aimed at making the world's banking system safer, a senior UK regulator said today.
Basel II shakeup to create many winners, losers
Banks in the United Kingdom, France, Switzerland and the Nordic region look likely to be among the winners under the proposed New Basel Capital Accord. By contrast, banks in Italy, Germany and the Benelux countries could be among the losers, according to a new study published today.
US urges foreign banks to make Basel II concerns known, may make some allowances
New York, June 10 - US subsidiaries of foreign banks were urged by a senior US banking regulator today to let both their US and home country supervisors know of any problems the US application of the Basel II capital rules might cause them.
European Commission targets end-week for Basel II paper
BRUSSELS, June 25 - The European Commission hopes to issue its third and final consultative paper on Europe's version of the complex Basel II minimum capital rules for bank safety on June 27 this week, Commission officials said today.
European Basel II paper expected early next week
BRUSSELS, June 27 - The European Commission hopes to issue its third and final consultative paper on Europe's version of the complex Basel II minimum capital rules for bank safety early next week, Commission officials said today.
Op Risk advanced approaches conference starts tomorrow
New York, May 28 - Bankers are gathering in New York for a key two-day conference called by global banking regulators on advanced approaches to measuring operational risk under the proposed Basel II capital rules aimed at making the world's banking system safer.
Basel II timetable under pressure again
BASEL, June 19 - The timetable for issuing the final version of the Basel II minimum capital rules for bank safety by the end of this year is under challenge but can still be met, despite problems with the US schedule for getting US bank reaction to the complex rules, banking regulatory sources say
Europe's Basel II paper delayed to next week
BRUSSELS, June 16 - The European Commission's third consultation paper on the capital adequacy directive that will bring the Basel II minimum capital rules on bank safety into effect in the European Union isn't likely to appear before the end of next week, Commission sources said today.
Fed's Ferguson reiterates Basel II policy to House hearings
WASHINGTON, June 19 - The US must keep to the option of using public comment and the implementation process to bring about whatever changes are needed to make the complex Basel II capital rules for bank safety work more effectively and efficiently, US Federal Reserve Board vice chairman Roger Ferguson said today.
Complex firms pose new challenges for financial regulators
BASEL, Switzerland, June 30 - Financial systems with alternative channels of funding pose new challenges for financial supervisors because of the greater complexity of financial firms and the intensified relations between firms and markets, the Bank for International Settlements (BIS) says.
Australia's big four banks won't gain significantly from Basel II
Sydney, June 23 - Australia's largest banks won't gain significant advantages over smaller rivals via the complex Basel II minimum capital rules for bank safety, the country's banking supervisors said today.
Dissent over Basel II grows as US defends stance
Chain reaction fears as Italian finance minister seeks accord changes. US lawmakers introduce Bill to thwart Fed Reserve By Melvyn Westlake
European experts meet to resolve op risk differences
Europeans seek agreement on investment firms and scope of op risk insurance, reports David Keefe
Basel sets criteria for op risk insurance
Global banking regulators have given a much firmer go-ahead to the role of insurance in reducing operational risk capital charges under the Basel II bank capital accord than was thought likely earlier this year.
An Italian spanner in the works
Finance Minister Tremonti wants Basel II changes to help SMEs. Cynics smell a turf war with the Bank of Italy By Melvyn Westlake
On guard for Basel II
IT for the new risk-capital accord could cost a top bank $200 million. Dean Jovic must ensure SunGard gets its share. Interview: Dean Jovic, head of Sungard TRS's Basel project
Stark EU choice: adopt Basel "lite" or dump accord
US policy over compliance with the new accord is a serious challenge for Europe, warns academic. Rethink needed on EU capital directive. Inflexible regulation feared
CP3/QIS3 - The accord's final shape emerges
BASEL - Risk managers, consultants, bankers, analysts and many others have been spending long hours combing through the third and final Consultative Paper (CP3) on the New Basel Capital Accord, and analysing the changes from previous proposals.
Canada's top banks to adopt advanced model
OTTAWA - Canada's six largest banks, which account for the overwhelming share of the country's bank assets, are "expected" by Ottawa regulators to adopt the most sophisticated approach to credit risk measurement under the new Basel capital accord.
Lloyd's to work with regulators on new regime
LONDON - The Lloyd's of London insurance market says it will work with UK supervisors to develop further the new risk-based prudential rules for the market proposed by UK regulators in April.
Solvency II paper expected in June
BRUSSELS - European Commission officials are on target with their plans to publish in early June a paper on the future organisation of work on Solvency II, the new regulatory regime for the European Union's insurance industry, regulators said at the beginning of May.
Caruana takes helm of Basel Committee
BASEL- Bank of Spain governor Jaime Caruana took over as chairman of the Basel Committee on Banking Supervision on May 1, two months earlier than previously planned.
Hawke defends illogical US regulation structure
WASHINGTON - The US has got the structure of its banking regulation about right, although the system offends all aesthetic and logical instincts, according to Comptroller of the Currency John Hawke.
Free markets best at curbing op risk in funds
BRUSSELS - It would not be "socially efficient to impose large capital requirements" on fund management companies, according to a new study.
Singapore consults on payment systems
SINGAPORE - Singapore regulators issued a consultation paper in April on a proposed law aimed at providing a clear framework for the oversight of financial market payment systems.
Emerging market banks fear mass takeover
Washington DC - There is great concern among regulators in the emerging market countries that the new Basel capital accord will lead to the widespread takeover of their banks by foreign financial institutions.
NZ to bolster bank corporate governance
CHRISTCHUCH, New Zealand - New Zealand's central bank is expected to make substantial progress in the next year or two in resolving approaches to corporate governance issues in the banking sector, Reserve Bank of New Zealand governor Alan Bollard said in April.
Loss-given-default is key to capital charge level
WASHINGTON - The way advanced banks estimate how much they expect to lose from a debtor's default will be crucial in determining the minimum capital they'll need to guard against credit risk under the Basel II bank capital adequacy rules.
Lack of common insurance accounting rules is hurdle
BASEL - Lack of agreement on common accounting standards for the world's insurance industry remains the great weakness of efforts to harmonise insurance regulation, says International Association of Insurance Supervisors (IAIS) secretary general Knut Hohlfeld.
Harsh lessons of the HIH collapse
Australia's insurance regulator heavily criticised in withering report on the A$5.3 billion HIH debacle David Keefe reports
The whole truth - and nothing but the truth
The Sarbanes-Oxley Act will change the face of corporate governance for financial services firms operating in the US. Tim Leech looks at making chief executives accountable for the actualité
Broader duties urged for US bank directors
Directors of US banks should be held to a broader, if not higher, standard of care than directors of other types of company given the special characteristics of banks, a paper in the New York Federal Reserve Bank's latest Economic Policy Review argues.
Enforcing Sarbanes-Oxley for national banks
US national banks listed on US stock exchanges are expected to comply with the auditor independence provisions of the Sarbanes-Oxley Act, the Office of the Comptroller of the Currency (OCC) said in April.
Does coherency matter?
Some key measures of risk fail the coherency standards set by mathematicians. Triphonas Kyriakis explains the implications for risk-based capital allocation
QIS 3 results back Basel II aims, regulators say
BASEL, Switzerland, May 5 - Global banking regulators said the results of the key QIS 3 survey of banks in 43 countries were generally in line with the aims of the proposed Basel II capital accord that's designed to make the world's banking system safer.
EU pressures US to revise stance
Concern over American decision to limit scope of Basel II. Will it undercut principle of competitive neutrality? By Melvyn Westlake
Basel II to be model for European insurance regulation
Europe's Solvency II project moves to its second phase as paper recommends a three-pillar, risk-based approach. By David Keefe
What they say: Securitisation and QIS3 reaction
The Basel Committee has posted up comments on the Web to its QIS3 Technical Guidance and Second Working Paper on Securitisation. Here's a summary of some responses
EU legislative timetable coming off the tracks
Elections and ten new member countries could delay critical capital adequacy directive. Late changes to CAD3 feared
Embattled Japanese banks sweat for Basel II
Japan's banks are virtually insolvent, on some calculations. But the Tokyo government wants all the leaders to adopt new regime By Melvyn Westlake
Study reveals capital hike for top banks
LONDON - A likely average rise in required capital for the world's biggest banks, under the new Basel capital accord, is confirmed by the results of a study now circulating among bankers.
Bond fears grow for Japanese banks
TOKYO - Yet another new source of concern is emerging for Japan's so-called "mega-banks," already beset by a tide of problems.
Insurers face op risk capital charge dilemma
BRUSSELS - Self interest could result in leading European insurance companies becoming keen supporters of operational risk capital charges in new risk-based solvency rules for insurers, industry analysts are speculating.
FSA warns on risk transfer
LONDON - The extent of credit risk transfer from banks to insurers remains a considerable concern, UK Financial Services Authority (FSA) chairman Howard Davies said in April.
CP 3 changes significant for some banks
BASEL, Switzerland - A good number of adjustments and corrections will be made to the proposed Basel II capital accord, which may be cumulatively significant for a few banks, as a result of the key QIS 3 survey, according to international banking regulators.
Basel II benefits don't exceed costs for most US regional banks
CHARLOTTE, North Carolina - US regulators believe the benefits for most US regional banks of adopting the proposed Basel II safety capital accord do not yet exceed the costs, according to Federal Reserve Board Governor Mark Olson.
US assurances on Basel II welcomed by UK
NEW YORK - The UK welcomed US undertakings that the US approach to implementing the complex Basel II safety capital accord would not be allowed to compromise a level playing field for international banking supervision.
Singapore reviewing capital adequacy rules for local banks
SINGAPORE - Regulators in Singapore are looking at the issue of the higher capital adequacy required of Singapore banks compared with foreign banks, according to Singapore deputy prime minister Lee Hsien Loong.
Basel II in doubt - what the papers said
LONDON - The US decision to limit the operation of the Basel II bank capital accord to just a handful of US banks raised doubts in the international financial press over whether the accord would see the light of day.
Deposit insurance role could ginger up supervisors
BASEL, SWITZERLAND - Making banking supervisors accountable for deposit insurance losses seems to reduce their forbearance with banks and may also improve on the time between bank examinations, a working paper from the Bank for International Settlements suggests.
EU Commission claims strong support for Cad 3
BRUSSELS - Strong support for the European Commission's plans for new capital adequacy rules for banks and investment firms was reflected in responses to the November paper on the proposals, the Commission said in April.
Draft Basel accord brings changes to op risk plans
Bankers think the end-May special conference on advanced op risk approaches will be more interesting than the consultative paper
A hint of things to come
Don't be deceived - US regulators are already applying the principles of Basel II to all kinds of US banks, says Tim Leech
Knowing the odds
Triphonas Kyriakis provides a guide to measuring risk for managers coping with risk-based regulation
UK welcomes US level playing field assurances on Basel II
NEW YORK, April 11 - The UK today welcomed US undertakings that the US approach to implementing the complex Basel II safety capital accord would not be allowed to compromise a level playing field for international banking supervision.
US Basel II approach won't affect level playing field, says Ferguson
WASHINGTON, April 9 - The US approach to implementing the Basel II bank capital adequacy accord won't compromise a level playing field for the regulation of international banking, Federal Reserve Board vice chairman Roger Ferguson said today.
Basel II benefits don't exceed costs for most US regional banks
Charlotte, North Carolina, April 11 - US regulators believe the benefits for most US regional banks of adopting the proposed Basel II safety capital accord do not yet exceed the costs, according to Federal Reserve Board Governor Mark Olson.
CP 3 brings technical changes to Basel II
BASEL, Switzerland, April 29 - Global banking regulators have, as expected, made changes to some of the technical details of the proposed Basel II bank capital accord in the light of a key survey last year on the accord's likely impact on banks.
Big banks fear excessive capital hikes
Study results show surprise average rise for largest banks. Is Basel II regime skewed to favour smaller firms? By Melvyn Westlake
Solvency II rules for EU insurers take shape
Europe's regulators are beginning to agree on a risk-based regime. Key paper comes as insurers face stress. By David Keefe
Big cut in Aussie banks' capital indicated
Results from impact study show the major Australian banks could be among the biggest Basel II winners
More dissent and wrangling in the US
Ferguson gets a roasting from lawmakers. Differences remain between regulators. But is it all just theatre?
What they say on Basel II: US pros and antis
On February 27, a key sub-committee of the US House of Representatives held hearings on the new capital adequacy accord. Here's a summary of the prepared testimonies.
FSA policy retreat over bank capital issues
LONDON - In a sharp reversal of policy that has deeply disappointed capital markets, Britain's financial regulator, the Financial Services Authority (FSA) has decreed that banks will no longer be able to raise Tier One Notes (TONs) as part of their core regulatory capital.
Leading UK banker fears Basel II complexity
BRUSSELS - A very real risk exists that the complexity of the Basel II bank capital accord will restrict the ability of banks to manage risks, the ability of supervisors to supervise and the capacity of markets to evolve and adapt, a leading UK banker said in March.
Call to end op risk capital charge anomaly
LONDON - Investment firms that choose to adopt the standardised approach to calculating their operational risk capital charge should not be penalised by having to hold more capital than other firms that opt for a cruder approach.
Bank of Spain chief named as Basel Committee chairman
BASEL - Bank of Spain governor Jaime Caruana will from July 1 succeed William McDonough as chairman of the Basel Committee on Banking Supervision, the Basel Committee said in early March.
Securitisation deal unlikely by May
BASEL - It now seems quite probable that the treatment of securitisation, under the proposed Basel II capital accord, will not be settled in time for the publication of May's crucial, final consultative paper on the shape of this new regime for the world's banks.
Aon hires Dowd from FSA
LONDON - Victor Dowd will in April join the professional risks division in London of insurance broker and risk management services provider Aon.
Exercise shows gaps in op risk loss data
BASEL - Banks have made progress in collecting operational loss data, but there's still a lack of a fully comprehensive sense of the range of potential op risk loss events experienced by banks because of gaps in data collection.
IMF urges risk-based rules for UK insurers
LONDON - UK supervisors must introduce risk-based reforms of insurance industry regulation quickly at the same time as they deal forcefully with the industry's current problems, says the International Monetary Fund (IMF).
Australian regulators focus on corporate governance
SYDNEY - Australian regulators are likely to lift their focus on agency risk management and corporate governance in the light of the first six months' experience with the PAIRS rating system.
Fitch plans to meet regulators on credit derivative disclosure
NEW YORK - Credit rating agency Fitch Ratings plans to meet global regulators, including the Basel Committee on Banking Supervision, with the aim of encouraging more disclosure of credit derivatives business, Fitch officials said in early March.
Credit ratings could boost Basel II procyclicality
BASEL - Global banking regulators might have to take account of the fact that credit rating agencies appear to react to cyclical economic conditions when they change their assessment of the credit worthiness of a company.
Looking for fair value
Agreement on fair value accounting for insurance contracts is vital to the EU's Solvency II project. A lot of work remains to be done.
IASB update defines insurance contract
The International Accounting Standards Board (IASB) issued an update in late February on phase I of its project on insurance contracts (see main feature).
UK regulators test for life assurance capital buffer
Scenario testing will help decide terms on which solvency waivers will be granted
Op risk insurance hits the radar screens
EU expected to sanction use of operational risk insurance products. Big potential market seen for insurance companies
Relating premiums to risk
Regulators want US banks to pay risk-based premiums for deposit insurance. It's going to be technically difficult - and what's more over 90% of banks don't pay anything at present
Regulators inspire revolution
The Basel II accord is promoting the spread of enterprise-wide risk, and the software behind it, beyond the world of banking, says Tim Leech of CARDdecisions.
Barclays' pioneering TONs issues will not be eligible as core capital in future.
Approval withdrawn after Basel meeting
QIS 3 confirms incentives for Basel II advanced approaches
LONDON, March 12 - The results of the QIS 3 survey on the impact of the Basel II bank capital accord show there will be incentives for banks to use advanced approaches to measuring and assessing their risks under the pact, international regulatory sources say.
Basel II complexity is a major concern for US Comptroller
WASHINGTON, March 4 - Important issues remain to be resolved in the proposed Basel II bank capital accord and a major concern is the accord's complexity, according to US Comptroller of Currency John Hawke.
Bank of Spain chief named as Basel Committee chairman
BASEL, Switzerland, March 10 - Bank of Spain governor Jaime Caruana will from July 1 succeed William McDonough as chairman of the Basel Committee on Banking Supervision, the Basel Committee said today.
Exercise shows gaps remain in op risk loss data
BASEL, Switzerland, March 16 - Banks have made progress in collecting operational loss data, but there's still a lack of a fully comprehensive sense of the range of potential op risk loss events experienced by banks because of gaps in data collection.
Basel turns the heat on the FSA
Britain's regulator challenged over controversial Tier 1 ruling. Barclays' TONs issue said to conflict with Basel guidelines. By Melvyn Westlake
Stripped down Basel II accord likely
Regulators expected to approve a no-frills version of capital accord. Aims to help emerging market countries, smaller banks.
Referee with an eye on unlevel playing fields
Consistency without uniformity is the goal. But the group will not adjudicate disputes. Interview: Nick Le Pan, head of Basel Committe's Accord Implementation Group
EU firms urge changes to op risk capital rules
Responses to Commission Working Document overwhelmingly favour reductions in op risk charges. Proposed rules said to hurt competitiveness.
What they say: roundup of industry views
On November 18, the European Commission invited trade associations to comment on its draft capital adequacy directive. Here's a summary of industry responses
Bankers, regulators fear European delay on Basel II implementation
UK regulators fear there's a risk that the bringing into effect of the Basel II bank accord in the European Union could be delayed, resulting in an "uneven playing field" in terms of banking supervision between the EU and other leading world economies.
Basel II & EU capital adequacy timetable
Bankers query McDonough optimism
LONDON - Many bankers have been surprised by Basel Committee chairman William McDonough's upbeat initial assessment of this winter's crucial study into the likely impact of his proposed new capital regime for the world's banks.
Demystifying Basel
WASHINGTON - The US Federal Deposit Insurance Corporation (FDIC) wants to demystify the complex Basel II bank capital proposals so that mere mortals among bankers can understand them.
Many winners and losers expected
LONDON - There are going to be big winners and losers among the world's banks as a result of the Basel II capital accord, due to take full effect in under four years time.
Study warns on credit risk transfer role
BASEL, Switzerland - Regulators must pay increasing attention to the incentives for regulatory arbitrage between different sectors of the financial industry created by credit risk transfer (CRT) techniques, such as financial guarantees and credit insurance, a study by a central bank forum said in January.
Credit transfer concentrates risks
LONDON - Credit risk transfer (CRT) techniques can help spread risk across the financial system, but they can also lead to greater concentration of risks, the Financial Services Authority (FSA), the UK's chief financial watchdog, said in January.
Situation vacant
Versatile banking diplomat required to chair committee of international banking supervisors based in Switzerland. Must be top regulator from Group of 10 country. Ability to keep smiling and keep a show on the road vital.
US banks need to increase IRB efforts
NEW YORK - US banks may need to increase their efforts in some areas in preparing for the implementation of the internal ratings based (IRB) approach to credit risk under the Basel II bank capital accord, Basel Committee chairman William McDonough said in February.
Little progress on op risk insurance
BASEL, Switzerland - The third and final consultation paper (CP 3) on the Basel II bank capital accord is unlikely to show much progress on the question of the role of operational risk insurance in the Basel II op risk proposals.
Market experts race to justify securitisation claims
LONDON - Bankers engaged in the securitisation business have been asked by Basel Committee officials to provide more detailed material and calculations to support the arguments made in a letter sent to regulators in January.
50 countries expected to be ready on the night
A substantial number of emerging market countries will be joining the G10 and the rest of the European Union for the start of the Basel II accord.
Tackling Insurance Risk and Operational Uncertainty
The relationship between insurance risk and operational risk needs to be understood if it is to be managed effectively. Here Clive Martin offers insights on alternative approaches that have lessons for anyone managing this relationship
Op risk is the culprit
Operational risk is behind most insurance company failures in Europe. A new report says regulators must adapt. By David Keefe
Money well spent
Operational risk technology spending is at a low, says Giles Bryan of GFT. But there is technology that financial firms should not ignore
How AIB lost $690 million
Former currency trader John Rusnak was sentenced to 7-1/2 years in prison in January for hiding over $690 million in losses at Allied Irish Banks. He was viewed by AIB as a solid performer at the Irish bank's Baltimore-based US subsidiary Allfirst Financial Inc, until his five-year fraud was discovered in February last year.
Credit rating agencies have more influence than regulators
The leading credit rating agencies have been more influential than financial regulators in bringing operational risk to the fore, by making op risk a key part of the assessment of a financial firm's credit-worthiness.
US regulators urge risk-based premiums for deposit insurance
WASHINGTON, February 27 - Premiums for bank deposit insurance in the US should be priced to reflect risk properly, US banking supervisors told legislators this week.
QIS 3 shows up op risk problems with Basel II
LONDON, February 28 - The key QIS 3 survey of banks has left technical experts with some problems over the operational risk provisions of the proposed Basel II bank capital accord, regulatory and banking sources say.
Early QIS 3 results suggest Basel II on track, says McDonough
NEW YORK, February 5 - Early results of the key QIS 3 survey of banks suggest that the Basel II capital accord proposals will work as planned, retiring Basel Committee chairman William McDonough said yesterday.
McDonough says US banks need to increase IRB efforts
NEW YORK, February 11 - US banks may need to increase their efforts in some areas in preparing for the implementation of the internal ratings based (IRB) approach under the Basel II bank accord, Basel Committee chairman William McDonough said today.
Dissent and wrangling in the US
Op risk opponents activate the political process. House hearings scheduled for February. Regulators divided. By Melvyn Westlake
Date set for Singapore insurance rules
Latest proposals for general insurers are aimed at harmonised risk-based supervision of the financial sector. By David Keefe
Time pressure builds for analysing QIS 3 results
Working Group will study responses at three-week session. Basel Committee expects to review findings at March meeting. By David Keefe
Taylor plan to scrap Basel II and start again
An idea for an alternative capital adequacy regime for banks is being closely examined by several key regulators in the US and UK. By Melvyn Westlake
Regulators grope for disclosure policy
US regulators struggle to get agreed approach with private sector
Japanese banks have negative capital
TOKYO -- Japan's biggest banks now have negative capital ratios, on average, according to the latest calculations of a leading credit rating agency
Survey seeks data on credit-ratings validation
NEW YORK - Three financial sector trade bodies launched a survey in December with the aim of giving guidance to banks and their national regulators on the validation of internal credit ratings under the proposed Basel II bank safety accord
Project financiers proving their case
LONDON- Bankers who arrange complex structured financial deals for multi-billion dollar projects around the world are increasingly confident of persuading regulators that this specialised business is no riskier than conventional lending to the corporate sector
Enron lessons: Banks must know their customers' business
WASHINGTON - US banking regulators stressed at US Senate hearings in December the importance of banks properly understanding their customers' business in the wake of the collapse of the energy trading group Enron
Everyone a winner?
LONDON - A high proportion of financial firms think that the Basel II capital accord will result in a reduction of the regulatory capital that they are required to hold
Hopes rise over securitisation meeting
LONDON - Specialists in the securitisation business are hoping to persuade regulators, when they meet in London on January 17, that their activities are being unfairly penalised under the proposed Basel II capital regime
BIS head warns on shift of authority from central banks
FRANKFURT, GERMANY - The consequences of the transfer of authority in recent years from central banks to independent financial supervisors may not yet have been fully thought through, Bank for International Settlements (BIS) retiring general manager Andrew Crockett said in December
ABA creates new op risk data programme
WASHINGTON - The American Bankers Association (ABA) has set up an "Operating Risk Committee," to both help bankers reduce losses and comply with the proposed Basel II capital accord
Basel market-risk rules not to blame for volatility
LONDON - The very slow response of Value at Risk (VaR)-based capital charges to financial market movements means the market risk charges required by the Basel bank safety accord can't be blamed for increased market volatility
Ten-year march to new insurance regime
IAIS role seen as encouraging common approaches among national insurance regulators. Interview: Knut Hohlfeld, Secretary-General of the IAIS
Insurance failures pose systemic risk
Regulators must watch companies with large market shares
Poor countries will be hit by new rules
Urgent need to change Basel II to avoid unfairness in loan costs. SME solution proposed
Basel regime unlikely to cut lending to emerging markets
Lifting the veil on the Basel Committee
Disclosed, for the first time, the individual members of the powerful committee that oversees international banking
Get with the process
The right IT is crucial in the era of risk-based regulation and Basel II. Centerprise's Reto Tuffli and Marnie Rosenberg argue the merits of BPM - business process management
January 24 2003- UK accelerates governance reforms for life insurers
LONDON, January 24 - UK regulators are accelerating plans to reform governance of life insurance firms, the Financial Services Authority (FSA) said today.
Australia wants more data from pension funds
Sydney, January 15 - Australian regulators today issued consultation proposals for a revised set of prudential returns designed to give a more accurate insight into the state of the retirement pensions industry.
Management problems behind all EU insurance company failures
London, January 15 - Management problems were the root cause of every failure or near failure of an insurance company in the European Union (EU) since 1996, according to a study by EU supervisors.
US regulator wants to demystify Basel II
Washington, January 15 - The US Federal Deposit Insurance Corporation (FDIC) says it plans to publish a series of papers analysing the implications of the complex Basel II bank capital proposals that are aimed at making the world's banking system safer.
QIS 3 responses confirm paucity of loss-given-default data
LONDON, January 22 - Initial analysis of responses to the key QIS 3 survey of the impact on banks of the Basel II capital accord confirms the difficulties of collecting loss given default (LGD) data, Ian Michael, senior manager in the Bank of England's regulation division said.
GRR: Basel Committee yet to agree on McDonough's successor
BASEL, Switzerland, January 17 - The Basel Committee on Banking Supervision has yet to decide on a successor to William McDonough as chairman of the committee, Basel Committee officials said today.
Investment firms urge changes to EU op risk regime
LONDON, January 28 -- Fears that the European Commission's proposed new capital adequacy legislation for banks and investment firms will have a harmful affect on some stockbrokers and asset managers are expressed in a letter sent to the EU today
.
Tough talking likely at crucial securitisation meeting
LONDON, January 16 - At a key meeting in London tomorrow, bankers, and regulators from the leading industrialised countries, will try to hammer out an agreement for the future treatment of securitised transactions under the proposed Basel II capital accord.
Letter calls for Basel Committee rethink on securitisation deals
LONDON, January 22 -- In a forcefully-worded letter, private sector groups engaged in the securitisation business have challenged the Basel Committee to re-think aspects of the proposed capital accord aimed at ensuring the future safety of the world's banking system.
|
