However, in the United States and many other countries, the current accord is applied to all domestic banks, both large and small. With the new proposal, national regulators will once again have to decide how widely to apply the Basel capital framework.
In my view, the greater complexity of the new accord, at least with respect to the IRB options, suggests that it should cover a narrower range of banks: those that have been active pursuers of capital arbitrage, those that have made – or can make – the greatest advances in risk measurement and management, and those for whom the adequacy of the current standard is most in question.