May 9, 2005 News Archive

Notice of Proposed Rulemaking Related To Basel II Delayed
In a press release, the four federal banking agencies (the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision) announced that additional analysis is needed before publishing a notice of proposed rulemaking (NPR) with respect to the U.S. implementation of the "International Convergence of Capital Measurement and Capital Standards: A Revised Framework," generally known as the Basel II Framework. The agencies had intended to publish the NPR at midyear 2005, but agreed to a delay to assess the results of a recently completed quantitative impact study (QIS4) better. The agencies agreed to issue the NPR at the earliest possible date after considering issues raised by the QIS4 results. The delay in issuing the NPR is intended to ensure that any proposed changes to the risk-based capital framework are consistent with safety and soundness, good risk management practices, and the continued competitive strength of the U.S. banking system. The agencies encourage institutions that seek to adopt Basel II-based rules at their inception to continue with their implementation efforts. The agencies continue to target the existing implementation timeline for Basel II. However, the additional work noted above may cause the agencies to revisit this timeline. The agencies will provide additional information on the timing and other aspects of Basel II implementation as it becomes known.

Greenspan on Derivatives
Chairman Greenspan spoke via satellite regarding the potential benefits and risk management challenges of derivatives during the Bank Structure Conference in Chicago on May 5, 2005.