So, for example, the Federal Reserve has suggested that the Basel Committee go beyond the important function of reviewing legal implementation and also monitor how capital standards are applied within banks. While a variety of methods could be used, we are particularly interested in establishing international validation teams to verify methodologies used at individual banks on such matters as the risk-weighting of trading assets.
Even as the Basel Committee should monitor compliance with the standards it establishes, it must not lose sight of the importance of supervisory cooperation in pursuit of the shared goal of a stable international financial system. The focus on rules and standards over the last few years has been both understandable and necessary, but the Basel Committee should not be purely a negotiating forum.