Chairman of the Federal Reserve backs Basel II for all US banks

Chairman of the US Federal Reserve System, Ben Bernanke, has offered his support for US-wide implementation of Basel II. Speaking at the Independent Community Bankers of America National Convention this week, Bernanke asserted that although community banks have different needs to the super-national organisations, the Accord could increase the risk sensitivity of the framework and mitigate competitive inequities in the banking system.

Bernanke commented on the different issues facing smaller banks, and explained that the creation of a new category for such banks has already reduced requirements for data collection and reporting. Such changes reduce the costs borne by smaller banks and increase lending flexibility.

The Federal Reserve is also participating in an ongoing interagency review of banking regulations pursuant to the Economic Growth and Regulatory Paperwork Reduction Act. This review seeks to identify