The Basel Committee expands to recognise the leading developing nations and those economies outside the West leading in Basel II development
BASEL - The Basel Committee on Banking Supervision will expand to include Australia, Brazil, China, India, Korea, Mexico and Russia. Representatives from their prudential supervisors and central banks will now be contributing to the reform of Basel II and the future of international regulatory capital requirements.
Nout Wellink, chairman of the Basel Committee and president of Dutch central bank and prudential supervisor De Nederlandsche Bank, said: "This expansion in membership will enhance the Committee's ability to carry out its core mission, which is to strengthen regulatory practices and standards worldwide."
The expansion reflects current international regulatory trends towards including developing nations within the club of Western countries that have historically collaborated on international regulation. The inclusion also highlights the use of Basel II capital requirement rules within the new jurisdictions - especially in Australia, where the Australian Prudential Regulatory Authority (Apra) has spearheaded use of the advanced measurement approach to operational risk far quicker than the US and many European regulators.
"Since its formation in 1998, Apra has built up strong relations with key international bodies like the Basel Committee," said Apra chairman John Laker. "Membership of the Basel Committee will ensure that Australia has a strong voice in global banking reform initiatives being developed in response to the global financial crisis."
The Apra chairman and the governor of the Australian central bank will be included in the enlarged Basel Committee. Representation for China recognises new moves to accelerate Basel II implementation within the country's internationally active banks. Korean inclusion represents recognition of Korean efforts towards early Basel II implementation - notably through the establishment of the Korec loss-sharing database in 2006.
The Basel Committee's previous membership roster was restricted to Belgium, Canada, France, Germany, Italy, Japan, Luxembourg, the Netherlands, Spain, Sweden, Switzerland, the UK and the US. Twenty nations are now represented.
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