Basel Accord finalisation delayed by six months

The committee noted that it will take the various national legislative and regulatory rule-making processes into account when making any additional changes. In addition, the committee was vague about whether or not the six-month delay would affect the final deadline of January 1, 2007 for implementation, saying only that “the ongoing further discussions by the committee as outlined in this press release are not expected to alter the need for banks to continue improving databases and risk management systems in preparation for the new Accord”.

The principal areas that the committee will focus on, based on the CP3 comments, include:changing the overall treatment of expected versus unexpected credit losses;simplifying treatment of asset securitisation, including eliminating the ‘supervisory formula’ and replacing it by a less complex approach;revisiting the treatment of credit card commitments and related issues; andrevisiting the treatment of certain credit risk mitigation techniques.”

The first item on the list is the most significant, and was the subject of significant pressure from US banks. The committee issued, alongside its announcement, a paper that outlined the “broad direction of the approach that the committee has directed its working groups to develop further”. It invited comments before the meeting of the committee in January 2004.

The committee says that it will also conduct a “further review” of the calibration of Basel II, using national quantitative impact studies and banks’ own statistics. It will “propose additional adjustments to the calibration of the new Accord based on this review”.

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here