June 23, 2003 News Archive

Basel II Testimony Before House Financial Services Committee
Representatives from the Federal Reserve, FDIC, Comptroller of the Currency and Office of Thrift Supervision testified on June 19th about issues related to implementation of the New Basel Capital Accord, commonly known as Basel II. The Accord's provisions will apply to internationally active banks, including about a dozen U.S. institutions. The U.S. financial institution regulatory agencies anticipate issuing an Advanced Notice of Proposed rulemaking in the next month, that would seek comments on plans for implementing Basel II for U.S. institutions in 2006.

Key aspects of Basel II include a framework of three pillars, constituting minimum capital charges in Pillar 1 for credit, market and operational risk, supervisory review of capital adequacy and institutions' internal assessment processes in Pillar 2, and market discipline through improved disclosure of risk and risk management processes in Pillar 3.

At this time, the U.S. financial institution regulators do not intend to apply the Basel II framework to U.S. community and regional institutions.

• Basel II proposal
• June 19, 2003 Testimony before the U.S. House Financial Services Committee
• May 29, 2003 Proceedings from a New York Fed conference on measurement of Operational Risk