Caruana: 2006 implementation of Basel II still on target, despite difficulties

Despite recent controversies in the wake of the third Basel II consultative paper (CP3), Jaime Caruana, governor of the Bank of Spain and chairman of the Basel Committee on Banking Supervision, says he believes the new Basel II Accord will be implemented by the end of 2006, as planned.

“The 1988 Accord was a blunt instrument that quickly fell behind the times,” said Caruana, speaking during a keynote address at Risk’s Credit Risk Summit USA 2003 in New York this morning. ”As many have pointed out [by way of complaint], the current proposals are much more sophisticated. But that’s the point,” he told conference delegates.

Most of the comment letters received during the recent consultation period focused on credit risk. In particular, the Basel Committee’s plan to include