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

The Basel Committee on Banking Supervision today issued a paper setting forth general principles for sharing of information between home country and host country supervisors in the implementation of the Basel II capital framework. These principles result from a consultative document published in November 2005, which elicited a number of helpful comments (summarised in an attached document). This paper was developed jointly with the Core Principles Liaison Group, which includes banking supervisors from sixteen non-Committee member countries.

The paper on Home-host information sharing for effective Basel II implementation highlights the need for home and host supervisors of internationally active banking organisations to develop and enhance pragmatic communication and cooperation with regard to banks' Basel II implementation plans. This is necessary to reduce the burden on the banking industry, conserve scarce supervisory resources and make implementation of Basel II more effective and efficient.

Mr Jaime Caruana, Chairman of the Basel Committee and Governor of the Bank of Spain, noted: "One of the key challenges of Basel II is the need to improve communication and coordination among home and host supervisors, which will benefit both supervisors and banks. This paper is a useful tool in helping to achieve that goal."

Mr Nick Le Pan, Chairman of the Basel Committee's Accord Implementation Group and Superintendent of Financial Institutions in Canada, added: "This paper is the result of a highly constructive dialogue among supervisors from both Committee and non-Committee member countries and input from internationally active banking organisations. As supervisors move forward in Basel II implementation, this paper will help them to develop practical, case-by-case information-sharing arrangements."

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, home supervisors and host supervisors. The paper, primarily addressed to banking supervisors, also describes the role of banking organisations in this process.