BASEL – Nout Wellink, the new chairman of the Basel Committee, architect of international prudential banking standards, is reckoned to be well advanced with plans to streamline its numerous sub-committees and working groups, and fill several key vacant chairmanships. The most delicate issue appears to be ensuring that the new appointments are sufficiently spread around to satisfy the preferences of as many member countries as possible.

MUMBAI – Hints since the spring of a postponement in India’s implementation of the new Basel capital standard for banks (Basel II) proved accurate at the end of October. The Reserve Bank of India (RBI), the country’s central bank, announced in the mid-term review of its annual policy statement, for 2006-2007, that it is delaying its Basel II implementation timetable by two years for most of its 85 scheduled commercial banks (accounting for 78% of total assets).

Finance industry leaders are calling on regulators to delay issuing principles for the recognition of default risk models used by banks and investment banks in their market trading activities. They also want regulators to completely reconsider the objectives and work programme adopted to deal with the measurement of so-called incremental default risk in the trading book and, thus, any capital charge that might be required to mitigate it. Industry insiders say that much more time is needed to develop appropriate rules in this highly complex, and rapidly evolving field.

WASHINGTON – Top US banking supervisor Roger Cole remains confident US banks will begin implementing the Basel II bank safety rules by the 2008 deadline set for the parallel running of the new capital adequacy regime alongside current rules.

BASEL – Ninety-five countries, in addition to the 13 member states of the Basel Committee of global banking regulators, have indicated they plan to implement the complex Basel II rules for improving bank safety and soundness, according to the latest survey of implementation plans around the world.

WASHINGTON – Connecticut US Senator Christopher Dodd, the Democrat seen as the next head of the powerful Senate banking committee following America’s mid-term elections in early November, told reporters he expects to move away from the panel’s preoccupation with financial institutions and focus on questions of security and prosperity.

BASEL – The instability of an economy should not limit the use of sophisticated internal ratings-based (IRB) systems for assessing credit risk – it’s just another challenge on the way to implementing the new Basel II bank capital regime, according to an award-winning paper* by an Argentine central bank staffer.

BEIJING – So-called cyclicality issues arising from the Basel II bank safety rules must be kept under review as experience is gained with the complex regime, an adviser to the UK central bank urged in late October.

Europe’s insurance industry believes regulators should rethink their proposals on the minimum capital requirement, or MCR, for Solvency II. The proposals as contained in the QIS2 test of the new regime are fundamentally flawed in certain respects, says CEA, the Brussels-based European insurance and reinsurance federation*.

Global accounting rule-setters reaffirmed in October their tentative conclusions, after hearing the views of leading US, European and Japanese insurance companies, on the thorny question of how to value the insurance contracts that form the bulk of insurer liabilities.