Compromises allow Basel II to progress

The Basel Committee on Banking Supervision said last month that there were no substantial issues remaining with the complex Basel II capital Accord, after a series of compromises involving the capital treatment of loans to small and medium-sized enterprises (SMEs), the treatment of credit card portfolios and a widely criticised floor on operational risk capital charges.

“There’s still some technical work to be done, but all the key issues are dealt with,” says one regulator with the Committee, which hopes to finalise the Accord by fourth-quarter 2003 for implementation in late 2006.

The statement came after several months of uncertainty, during which some bankers and regulators thought the much-delayed pact would never come into force. The Basel Committee, the body of senior banking supervisors from the leading economies that in effect regulates