 back to the credit derivatives market practice committee.
The firms consulting the marketplace include a credit derivatives dealing
firm, a bank portfolio manager and an end user of credit derivatives. Each
group has European and US representation.

It is unclear whether the clarification on the successor issue, which will
probably be released, as a supplement later this summer, will apply
retroactively, one market official said.


Basel 2 comment period ends, work for banks begins
Reuters - May 30, 2001
By Alice Ratcliffe

ZURICH, May 30 (Reuters) - An industry comment period on new global capital
rules dubbed " Basel 2" ends on Thursday, but the work will just be starting
for banks calculating how the sweeping changes will affect their businesses.

The new rules are due to be enforced in various legal jurisdictions starting
in 2004. They will apply to most of the world's banks now subject to the
outmoded Basel Accord dating from 1988. Basel 2, once adopted, will also set
standards for securities and brokerage firms in the European Union.

Despite outcry from some industry participants that the new rules were
formulated too quickly, supervisors appear set to complete Basel 2 by
year-end, in time to implement it by 2004, according to industry sources.

One reason for the haste is that the Basel Committee on Banking Supervision
drafting the new rules worries an industry stalemate could delay adoption of
the badly-needed new rules in some key jurisdictions. The 2004
implementation date is already seen as a sop to the lengthy EU legislative
process.

"Time (Basel 2) uses up eats into time for the EU directive," said a source
familiar with the issues, adding the Basel Committee is "between the devil
and the deep blue sea".

SWEATING OVER CALIBRATION

Of course, that doesn't make the process any smoother.

Officially, banks are to have all comments submitted by May 31. Unofficial
dialogues will likely continue for a long while.

One area of concern is Basel 2's approach to capital needed to cover lending
exposure. It