Exchange Ideas

Risk Management & Regulation

A weblog by Chris Whalen, Institutional Risk Analytics

 

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January 09, 2006

Is it Basel Ia or Something Different?

This week, my firm filed its comments on the advance notice of proposed rulemaking on possible modifications to the risk-based capital standards for all domestic banks, bank holding companies and savings associations in the US ([Docket No. 05-16], RIN 1557-AC95). You may request copies of all of the comments that the OCC has received by contacting the OCC's Public Information Room at regs.comments@occ.treas.gov.


In our comment, we opine on the performance of the regulators in managing the Basel II process, asking whether the US regulators afforded opponents too great an opportunity to sidetrack the process.

"The apparent lack of preparation of the OCC, Fed and other regulators has allowed the opponents of Basel II to get away with specious, nonsensical arguments in lobbying members of Congress," IRA notes.

Most important, we also assert that small banks have little to fear from foreign predators under Basel II

"A close examination of the facts, including the bank performance data maintained by the US regulators themselves, shows that the few regional US banks acquired by foreign institutions over the past decade have generally been modest performers, which nonetheless demanded significant purchase premiums. Better managed banks, on the other hand, seem to have little to fear from foreign acquirers."

Comments are welcome.

Posted by whalenc at January 9, 2006 08:12 PM

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