Basel II, of course, is the key issue today, and given that the U.S. agencies' position on scope of application has clear implications for your banks' operations in this country, choosing Basel II and its scope of application in the United States as my topic was not difficult.
7  A joint analysis by the Financial Stability Board and the Basel Committee on Banking Supervision attempts to quantify this adjustment. It suggests that a 3-percentage-point increase in banks’ common equity Tier 1 capital ratio would raise lending spreads by around 45 to 50 basis points. Estimates for Canada, prepared by the Bank of Canada, fall very close to this range.