Basel Committee issues consultative document on home-host information sharing for effective Basel II implementation

The Basel Committee on Banking Supervision today issued for public comment a paper setting forth general principles to guide sharing of information between home country and host country supervisors in the implementation of the Basel II capital framework.

Home-host information sharing for effective Basel II implementation addresses a range of considerations for banking supervisors as they develop their Basel II implementation strategies. The need for supervisory validation and approval of banks' Basel II approaches across jurisdictions will make it necessary for supervisors to enhance information sharing so as to reduce the burden on the banking industry and conserve scarce supervisory resources.

"As supervisors implement Basel II on a bank-by-bank basis, this paper will assist them in developing effective information sharing processes," stated Mr Jaime Caruana, Chairman of the Basel Committee and Governor of the Bank of Spain. "We need to foster more effective supervisory cooperation, which is key to the success of implementing Basel II."

Mr Nick Le Pan, Chairman of the Basel Committee's Accord Implementation Group and Superintendent of Financial Institutions in Canada, added: "This paper builds on the high-level principles¹ for cross-border implementation of Basel II and strikes an appropriate balance between the legitimate information needs of home and host supervisors and the expectations that supervisors have of banks in this regard."

In addition to general principles of information sharing in the context of Basel II, the paper also sets out practical examples of information that could be provided by banks, by home supervisors and by host supervisors. The paper is primarily addressed to banking supervisors, although it also describes the role of banking organisations in facilitating this process.

This paper was developed in association with the Core Principles Liaison Group, the Committee's working group that includes banking supervisors from sixteen non-Committee member countries

Comments are invited by 28 February 2006 and should be addressed to:

Basel Committee on Banking Supervision
Bank for International Settlements
Centralbahnplatz 2
CH-4002 Basel
Switzerland

Alternatively, comments may be sent via e-mail to baselcommittee@bis.org. (Please use this e-mail address only for submitting comments and not for correspondence).

¹ High-level principles for the cross-border implementation of the New Accord, Basel Committee on Banking Supervision, August 2003.