BIS to modify Basel II rules

The Basel Committee on Banking Supervision is to make changes to the Basel II capital framework in response to the ongoing financial crisis. The modifications are expected to include the upping of Pillar I regulatory capital requirements, as well as the strengthening of liquidity management practices.

The adjustments will mean higher charges for some structured credit assets, liquidity facilities for off-balance-sheet vehicles and assets held on bank trading books. However, it is not clear by how much any of these charges will increase.

"Supervisors cannot predict the next crisis, but they can carry forward the lessons from recent events to promote a more resilient banking system that can weather shocks, whatever the source. The key building blocks to core bank resiliency are strong capital