Banks urged to make Basel II views known in QIS 3

BASEL II UPDATE

LONDON -- Banks would be wise to make their views on the complex Basel II bank capital accord known via the key QIS 3 survey, the UK's chief financial regulator said in September.

QIS 3 -- the third Basel II quantitative impact study -- will seek information on how the Basel II accord would affect banks when it comes into effect in late 2006, noted Financial Services Authority (FSA) chairman Howard Davies in a speech ahead of the October 1 release of QIS 3. The FSA is the UK's main financial market watchdog.

Davies said QIS 3 was not formally a consultative exercise, but it would allow banks to see an overview of the Basel II proposals for determining minimum protective capital requirements for major banks.

"You will then be able to reach a proper assessment of whether the (Basel) committee has struck the right balance between risk sensitivity and complexity, both overall and in individual areas," he told the annual supervision conference of the British Bankers' Association (BBA), the body that represents both UK banks and foreign banks based in Britain.

Davies said QIS 3 is an important staging post, rather than a resting place, on the road to Basel II.