Circular
Banking Agencies Announce Revised Plan for Implementation of Basel II Framework
October 3, 2005
Circular No. 11737
To All Depository Institutions and Others
Concerned in the Second Federal Reserve District:

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) have announced their revised plans for the U.S. implementation of the "International Convergence of Capital Measurement and Capital Standards: A Revised Framework," otherwise known as Basel II.

The agencies previously announced on April 29, 2005, that they were delaying issuance of a notice of proposed rulemaking (NPR), pending additional analysis of the quantitative impact study (QIS4) submissions.

The agencies intend to move forward with an NPR for domestic implementation of Basel II, but plan to introduce additional prudential safeguards in the NPR to address concerns identified in the analysis of the results of the QIS4 conducted with the industry. The agencies expect that the U.S. Basel II proposal will be available in the first quarter of 2006.

The agencies expect to shortly publish for notice and comment an advance notice of proposed rulemaking on possible modifications to the risk-based capital rules for banks that do not become subject to Basel II-based capital rules.

The revised transition schedule for the domestic implementation of the Basel II framework will permit industry consideration of and public comment on these two rulemaking initiatives along similar timeframes.

Press release PDF

Contacts:
Stefan Walter
Senior Vice President
Financial Sector Policy and Analysis
stefan.walter@ny.frb.org
(212) 720-5487

Lance Auer
Assistant Vice President
Financial Sector Policy and Analysis
lance.auer@ny.frb.org
(212) 720-2847

Media contacts:
Dave Skidmore
Federal Reserve Board
(202) 452-2955

David Barr
FDIC
(202) 898-6634

Kevin Mukri
OCC
(202) 874-5770

Kevin Petrasic
OTS
(202) 906-6677