Financial authorities in the U.S. have stated they will do everything they can to ensure that Basel II does not undermine the strong capital base at U.S. banks and intend to measure just how effective the accord’s system of risk management and reserve capital is. Experts at the InfoWatch analytical center say the results will give bankers worldwide some more food for thought.
The U.S. Federal Reserve intends to conduct “ongoing” and “detailed” analyses to ensure that the version of Basel II adapted for the U.S. does not lead to unnecessary levels of reserve capital at the country’s banks, Reuters reports.
A Federal Reserve spokeswoman said the agency wants to make sure the introduction of Basel II does not disrupt the strong capital base that U.S. institutions now have. The spokeswoman added that the Fed wanted to ensure that the Basel II framework delivers a strong and risk-sensitive base of capital for the largest and most complex banking institutions.
At the end of March the Federal Reserve published a notice of proposed rulemaking for Basel II risk-based requirements especially adapted for U.S. banks. Other bank regulators have to formally sign off on them before they are issued for public comment.
“I think the international financial community will be just as interested as the Americans to find out how Basel II fares in the U.S. I’m sure the Federal Reserve will approach its analysis of Basel II very thoroughly, so we should have some more food for thought,” says Denis Zenkin, marketing director at InfoWatch.
Source: Reuters
