FBE Comments on Third Consultative Paper

30 July 2003

Commenting on the third Consultative Paper on the new Basel Capital Accord, the European Banking Federation (FBE) calls for further clarification on the scope and purpose of the Pillar 2 Supervisory Review Process.

The FBE is concerned that the proposed introduction of a series of specific issues that banks and supervisors should focus on when carrying out the supervisory review is moving toward a system of automatic additional capital requirements driven less by the specific circumstance of each bank and more by a general regulatory requirement. This would be an unacceptable outcome, not least because these requirements have not been included in the calibration of the Accord.

The FBE also believes that further calibration of the Accord should be carried out before implementation in 2006. Additional quantitative impact studies would help to assess methodology convergence and increase confidence in the New Accord.

FBE comments

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