It's hardly surprising that European officials are 'regretting' the US departure from the international gentlemens' agreement. What was the point of sitting in windowless conference rooms eating bad sandwiches for nigh on seven years? One consultant from the big four accounting firms I recently spoke to said he had walked up to Roger Ferguson, vice chairman of the Federal Reserve Board, and asked him whether or not he had meant it a few years back when he said that Basel I was "broken" and needed fixing.
Certainly, most countries didn't do QIS4, and are now doing QIS5 – so we will have to wait and see how the results come in from those studies. If they look like the US data – with its dramatic and uneven credit risk capital declines – the whole framework may need revisiting. But at the moment, this is not expected.
No, the rest of the world is getting on with the task of implementing the agreed framework – even India and China. The US delay is probably for the best, but its departure from the framework in key areas will put international co-operation under strain before long.