Basel 2.5: US ratings workaround criticised
US regulators published a proposal in December that would enable domestic banks to implement market risk capital rules without relying on credit ratings. But bankers claim the rules are overly conservative and put them at a competitive disadvantage. Do they have a point? Mark Pengelly investigates
US supervisors made what seemed like an important breakthrough at the end of last year. Having been forced to delay full implementation of Basel 2.5 due to a Dodd-Frank Act requirement that forces them to remove any reference to credit ratings from their regulations, they finally came out with a proposed workaround in December – one that would allow US banks to implement the Basel 2.5 rules on
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