Supervisory Recognition of Netting for Capital Adequacy Purposes

This consultative report proposes that the 1988 Capital Accord should be revised to recognise, in addition to netting by novation, other forms of bilateral netting of credit exposures to the extent that such arrangements are effective under relevant laws and comply with the other minimum standards set forth in the Lamfalussy Report interbank netting schemes, published by the BIS in November 1990.