International auditing standards are being introduced across the EU, backed by a network of oversight boards and audit inspection, coordinated by a potentially powerful new committee - By Melvyn Westlake

A new and potentially powerful body is emerging in Britain to regulate corporate reporting and governance.

US insurance regulators’ shock classification of a new hybrid security has implications for the definition of bank capital - By Melvyn Westlake

US banking supervisors will consider any issues identified in a study of Basel II being prepared for the country’s lawmakers by a Congressional watchdog body, top Federal Reserve Board official Roger Cole told the Board when introducing the Basel II NPR.

The Basel II NPR proposes a so-called supervisory mapping function for a key element in the measurement of credit risk “because it appears difficult for some banks to produce internal estimates of loss given default (LGD)”.

BEIJING – China’s largest banks will start implementing the new Basel capital accord (Basel II) between 2010 and 2012 it was announced in April by Liu Mingkang, chairman of the China Banking Regulatory Commission (CBRC), the country’s banking watchdog.

LONDON – Further significant revisions have been made to the guidelines for banks and investment firms implementing the advanced credit and operation risk approaches under the EU’s new capital adequacy regime. This follows a barrage of criticism from banks and industry associations complaining that the guidelines were still too burdensome and prescriptive, despite earlier changes.

ROTTERDAM – Capital requirements for insurers under Europe’s planned Solvency II regime should be substantially lower, and more straightforward, than those for banks because of the lack of systemic risk in insurance. Failure to recognise this could ultimately weaken defences against financial instability, according to a “shadow” regulatory group of academics and experts.

WASHINGTON – Senator Paul Sarbanes, one of the two principal sponsors of the eponymous Sarbanes-Oxley Act, has made a strong defence of the 2002 corporate governance law, rejecting critics’ demands that it be diluted or scrapped altogether.

NAPLES, Florida – As US regulators develop new rules for the thousands of US banks that won’t be adopting the complex Basel II safety regime, they will analyse carefully the trade-off between risk sensitivity and the greater burden placed on banks, Fed Board governor Susan Schmidt Bies said in mid-April.