Risk 's Derivatives and Risk Management Summit Europe 2006: Regulators and ratings prevent meaningful Basel II savings

Banks may be unable to benefit from regulatory capital reductions under the Basel II reforms because of local rules and the requirements of rating agencies.

Speaking at Risk’s annual Derivatives and Risk Management Europe conference in Monte Carlo, Capital One’s director of economic capital Geoff Rubin said that although the new rules are a better reflection of risk, and reduce capital levels on the whole, they will not be the “driving force” of economic capital calculations.

“I don’t think that in the US the first Basel Accord is necessarily driving many capital decisions,” he said. “If our rating agency insists on a certain capital level and under