US/UK Basel divide highlighted

Washington DC – Although European regulators and financial services executives reacted with disbelief at the tone of the Basel II hearings held in the Senate Banking Committee in early November, their US counterparts said the hearings merely reflected the debate that the country is having over the role Basel II should have in its domestic regulatory framework.

In Europe – where Basel II implementation has already been made law in the form of the Capital Requirements Directive – there was surprise that US regulators should have to re-make arguments in favour of Basel II at this late stage. But this was what John Dugan, Comptroller of the Currency and Susan Bies, a governor at the Federal Reserve, did in their opening statements. In fact, a whole