Safe and sound banking will be better supported by the US prompt corrective action approach than by Basel II, concludes Professor George Kaufman.* He fears the new Basel accord may encourage large US banks to successfully pressure regulators into lowering capital standards.

Many emerging market countries fear Basel II could undermine their powers over their own banking markets. Piotr Bednarski and Grzegorz Bielicki of Poland’s central bank argue against moving too quickly and too narrowly on centralised supervision espite mounting pressure from the large cross-border banks for supervision to be centralised in the countries where they are headquartered, Poland intends to defend vigorously its right to supervise foreign banks’ subsidiaries on its own terms.

Host supervisors have sometimes felt uncomfortable during their 18 months’ experience of dialogue with banks and consolidating supervisors following the publication in 2004 of the Basel II framework for bolstering bank safety.

BASEL, Switzerland, September 21 (Global Risk Regulator) – 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.

PALM DESERT, California, September 26 (Global Risk Regulator) – The US must have a clear plan to address the concerns raised by the test of the risk-focused Basel II bank safety rules that showed a significant reduction in protective capital across banks, Comptroller of the US Currency John Dugan said today.

WASHINGTON, September 28 (Global Risk Regulator) – US banking supervisors were urged today not to concede anything to their foreign counterparts at a key meeting next week on the controversial Basel II bank safety rules.

WASHINGTON, September 30 (Global Risk Regulator) – US banking supervisors expect to issue details of their delayed plans for implementing the Basel II bank safety rules in the first quarter of 2006 now that they’ve postponed implementation for a year.

WASHINGTON, September 30 (Global Risk Regulator) – The new timetable and plans for bringing the Basel II bank safety rules into effect in the US mark an important step forward in implementing the rules, Federal Reserve Board governor Susan Schmidt Bies said today.

WASHINGTON, September 30 (Global Risk Regulator)-The US has effectively postponed implementation of the Basel II bank safety rules by a year to 2009, a joint statement by the four federal supervisory agencies indicates.

STRASBOURG, France, September 28 (Global Risk Regulator) – Europe’s Parliament today approved the law that will give effect to the Basel II bank safety rules in the European Union, after cutting a last-minute deal on the European Commission’s rule-making powers under the law.