Basel

The new Basel Capital Accord: regulatory treatment of securitisation transactions for banks after 2006

Jonathan G F Walsh, Norton Rose, London, jonathan.gf.walsh@nortonrose.com

Introduction

This article is the latest in a series examining the proposals for the regulatory treatment of securitisation transactions set out in the consultation papers issued by the Basel Committee on banking supervision (the Committee).The latest (and perhaps final) working paper has now been issued by the Committee. Following the last Quantitative Impact Study exercise, or QIS3, the Committee issued the third consultative document/working paper (CP3) in April 2003, for final comment by 31 July 2003. The European Commission also issued its third consultation paper (CD3) on the implementation of the “Basel II” proposals in July 2003. In addition, in the same month, the UK Financial Services Authority (FSA) issued a consultation paper, Consultation Paper 189, setting out for the first time its primary approaches to the implementation of the new Basel and EU capital adequacy standards. Accordingly, now would seem an appropriate time to take stock of the capital treatment of asset securitisation likely to apply as from 2007 in a large number of European jurisdictions as a result of the implementation of the new rules.