31 August 2003

ECB opinion on BIS third Consultative Document

The European Central Bank (ECB) remains very supportive of the work being undertaken by the BCBS and notes that the third consultative proposals mark significant progress relative to the previous proposals of the BCBS.

The improvements include, inter alia,

the flattening of the risk weight curves for internal ratings based (IRB) approaches,

the treatment under Pillar II for banks using the IRB approach to address pro-cyclicality concerns,

the treatment of banks’ exposures to small and medium-sized enterprises (SMEs) and retail exposures, and

the revised proposals for operational risk for banks or banking systems experiencing high credit margins.

Full paper

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