After receiving more than 250 comments on its proposals to revise the 1988 Capital Accord, the Basel Committee on Banking Supervision has decided to delay its implementation until sometime in 2005.

The committee says it is delaying the changes “in light of the extremely high quality of the comments that have been received and in recognition of the committee’s desire to continue working cooperatively with the industry to achieve the best possible proposals.”

The committee now plans to release a complete proposal for an additional round of consultation in early 2002 and will finalize the new Accord during 2002. Accordingly, the Basel Committee envisions an implementation date of 2005 for the new Accord.

The committee says it remains strongly committed to the three-pillar architecture of the new Accord and to the broad objective of improving the risk sensitivity of the minimum capital requirements. It says it needs to fine tune the new proposals to encourage banks to adopt these more advanced approaches to credit risk.

The committee has concluded that the target proportion of regulatory capital related to operational risk, i.e. 20%, will be reduced. It also believes that it must work on an appropriate treatment of credit exposures related to small and medium sized enterprises.