A proposed amendment to the new capital directive could give big advantages to public sector banks and increase systemic risk - By Melvyn Westlake

Small banks could benefit from US confusion over Basel II. The regulators seem anxious to calm their fears. By David Keefe

All banks must apply Simplified Standardised option for credit risk from end-2005. Big banks may adopt advanced option later

Advanced approaches to operational risk face major tests in the US. But some see a solution to a risk allocation problem that is dividing Washington\'s bank regulators. By David Keefe

US banks using an advanced measurement approach (AMA) to assessing their operational risk are still working towards incorporating all four of the required data elements into their systems.

BRUSSELS – The European Commission has signalled its intention to consider ways to streamline the supervision of cross-border financial institutions within the 25-nation EU bloc. In its Green Paper on Financial Services Policy over the next five years, published on May 3, the Commission sets out a series of steps to increase supervisory convergence in Europe, bring greater clarity to the roles of supervisors, identify gaps in supervision and examine impediments to the more extensive use of “consolidated” (or “lead”) supervision.

LONDON – Big Greek banks will be able to reduce their credit risk capital charges as they introduce the more sophisticated approaches to assessing credit risk under the international Basel II bank safety rules, a top Greek central banker said in April.

NEW YORK – Regulators and banks must pay more attention to risks to financial market liquidity, and the effects on liquidity that could result from the exit of a major dealer, New York Federal Reserve Bank president Timothy Geithner warned in April.

MUMBAI – India’s larger banks need to invest heavily in advanced technology in order to move to the advanced risk measurement approaches of the risk-focused Basel II bank safety rules, a top Indian central banker said in late April.

BEIJING – The cost of recapitalising China’s major banks has exceeded $250 billion since 1998, and could increase by another $100 billion or more, according to estimates by Moody’s credit rating agency. This is a multiple of the final cost to the US taxpayer of bailing out the savings and loans institutions in the late 1980s and early 1990s.