Fed’s Ferguson says Basel II will apply to 20 US banks

The number of US banks expected to implement Basel II is now likely to be twice the number unveiled to a stunned international banking community during Congressional testimony in February, Roger Ferguson, vice-chairman of the US Federal Reserve, has told Risk .

Ferguson, contributing to a forthcoming special feature on the release of the Basel Committee on Banking Supervision’s third consultative paper (CP3) in Risk’s June edition, said US agencies now expect Basel II to apply to 20 US banks. These banks account for two thirds of all US bank assets and 99% of US bank assets held internationally.

This is twice as many banks as mentioned by US agencies earlier this year, and should help restore confidence in the Basel II process. This confidence was shattered in February when the US indicated only 10 US banks would adopt Basel II, sparking fears of a two-tiered implementation of Basel II, not just in the US, but also other major markets, notably Europe.

Risk received comment from more than 14 senior regulators, trade body representatives, risk managers, lawyers and technology providers for the article.