Newsletter Oct 2005: Thirty countries to take part in fifth Basel II test

BASEL, Switzerland – Some 30 countries are expected to take part between October and December in the planned fifth test of the complex, risk-focused Basel II bank capital rules that are designed to make the world’s banking system safer. Bankers and their regulators around the world will be anxious to see to what extent, if any, this international test will reflect the findings that so worried US regulators when they carried out their own national testing of the rules on US banks last year and earlier this year. The US results showed that the capital held by the 26 participating banks to absorb surprise losses could fall significantly, under proposed Basel II formulas, from the levels required under the current, and simpler, Basel I capital adequacy rules.