Navigation * Home / News / EU officials talk of amending Basel II timetable differences EU officials talk of amending law because of Basel II timetable differences LONDON, November 17 2005 – European officials are in early talks about whether the law giving effect to the Basel II bank safety rules in the European Union needs amendment because of the different EU and US timetables for implementing the rules, a top UK regulator said today. However, Michael Folger, director of wholesale and prudential policy at Britain’s Financial Services Authority (FSA), added that UK regulators believe there’s a way through the problems that won’t require changes to the EU’s Capital Requirements Directive (CRD). The CRD is the law that will apply the complex, risk-focused international Basel II capital adequacy rules to all banks and investment firms in the 25-nation bloc in two stages commencing in 2007 with the second stage starting a year later. On the face of it, it would mean European banks with US operations, would be required to report under two different solvency regimes: Basel II in Europe and the current and simpler Basel I rules, or a revised version of them, in the US. The reverse would hold for US banks with European operations.
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International banks are threatened with significant additional compliance costs because of the recent decision by the federal banking supervisory agencies delaying the implementation of Basel II in the US by a year to January 2009. This means that big European banks, and any non-US banks adhering to the same timetable, would start operating under Basel II at least a year before their US rivals.
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