The depth and quality of the responses demonstrate that many banks and industry associations understand the far-reaching significance of the New Accord. I would like to offer the Committee’s sincere thanks to the many organisations and banking associations here in the United States, Canada,  2  BIS Review 46/2003  and elsewhere that invested considerable time and resources in the consultations. You shared important views through comment letters, gathered data for impact studies, and engaged in discussions such as those that will be held here over the coming days. If you’ve been following our work since the first consultative paper was released in 1999, you will know that the proposals have evolved and improved considerably thanks to the industry’s candour, its creativity, and its drive to innovate. At the Committee’s meeting in Madrid earlier this month, all members acknowledged our responsibility to consider carefully your concerns and those of the broader industry. What is most important to the Committee is the quality and consistency of the new Accord. At the same time, we recognised the need to provide banks with as much certainty as possible while they plan and prepare for the adoption of the new rules. The members of the Committee agreed on the importance of finalising the New Accord expeditiously and in a manner that is technically and prudentially sound.
Future Work: Full Credit Risk Modelling The Committee will spend the next few months considering these and other themes carefully and finding ways to balance the complexity of the New Accord against the need for appropriate sensitivity to risk; to ensure that the assumptions supporting the rules are appropriately conservative, but not excessively so; and to apply the rules consistently to protect and promote competition in the global banking market. But when the ink dries on the New Accord, rest assured that the Basel Committee will not be adjourning. Just from the comment letters we received, we can already identify a wide range of issues ahead to continue to find new ways to advance risk management, to promote greater transparency, and to strengthen the stability of the financial sector. I’d like to conclude by mentioning just two of the potential items on our agenda for future work once the New Accord is implemented. The first would be to consider the benefits of full credit risk models in the calculation of minimal capital requirements. In theory, a bank’s capital requirements would then reflect to the greatest degree the economic benefits of diversification in its balance sheet. In fact, the Committee did at one point evaluate whether advanced banks should be permitted to estimate the degree to which their assets might behave similarly or default together in the New Basel Accord. As you know, we decided that we are not quite there yet.