Also, the Accord has effectively contributed to enhanced market transparency, to international harmonization of capital standards and thus, importantly, to a level playing field, within the G-10 countries and elsewhere. Indeed, virtually all non-G-10 countries with international banks of significance have introduced, or are in the process of introducing, arrangements similar to those laid down in the Accord.
Even with these announcements, however, Europe’s financial markets and economy remain under significant stress, with spillover effects on financial and economic conditions in the rest of the world, including the United States. Moreover, the possibility that the situation in Europe will worsen further remains a significant risk to the outlook. The Federal Reserve remains in close communication with our European counterparts.