Basel II Accord set for delays

BASEL -- Basel II’s timetable may be delayed to enable the Basel Committee on Banking Supervision to grapple with a number of controversies created by the financial industry during the comment process for the third consultative paper (CP3). The Committee’s decision on the potential delay is to be made at its October 8-10 meeting.

Speculation about the delay was rife when European Central Bank president Wim Duisenberg confirmed that it was a possibility in early September, in a report by Reuters. Then, in a mid-September interview with the same news agency, chairman of the Basel Committee Jaime Caruana confimed that a delay was under consideration, claiming that it was more important to get the document right than to deliver it by the self-imposed deadline of December of this year.

US banks, which are strong critics of Basel II, favour a delay, but such a delay would throw into chaos efforts to get related legislation through the European Parliament. According to one capital adequacy expert from the European Commission: "We hope to agree Basel II early next year, but if serious problems are to be resolved, there could be a one-year delay. Of course, we favour drafting a high-quality proposal within the current time table, but making a multinational agreement is important." OpRisk

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