BASEL – The chairmanship of the Basel Committee on Banking Supervision, the body that in effect regulates international banking, will remain in the hands of a European central banker for the next few years.

ORLANDO, Florida – US regulators expect to apply revised market risk rules only to banks meeting the threshold criteria for adopting the existing rules, Federal Reserve Board member Susan Schmidt Bies told US bankers in early May.

LONDON – The sweeping changes to EU financial markets being introduced by the controversial Markets in Financial Instruments Directive (MiFID) should bring economic benefits and fresh opportunities for securities firms in Britain, a top regulator said in mid-May. In upbeat remarks, Hector Sants, head of wholesale and institutional markets at the Financial Services Authority, Britain’s financial watchdog, said London firms were planning to exploit the new freedoms that MiFID would introduce.

LONDON – Any attempt by the European Commission to impose transparency regulations on bond markets, along the lines being introduced for equities, is likely to be risky. That is the broad message of two independent studies undertaken by research teams under the auspices of the Centre for Economic Policy Research (CEPR), a non-profit network of 700 economists based in Europe.

HYDERABAD, India – Developing economies are likely to face big challenges in implementing the Basel II bank capital rules, given the relatively low level of full compliance with current rules, India’s central bank governor said in early May.

WASHINGTON – Hedge funds appeared to get a clean bill of health at US Senate hearings in mid-May, when the benefits they provide were generally agreed to outweigh any harm they might cause.

US banking industry representatives welcomed President George W Bush’s nomination in early May of Sheila Bair as the next chairman of the board of directors of the Federal Deposit Insurance Corporation (FDIC), the agency that insures customer deposits at US banks.

Europe’s insurers are worried about parameters in the QIS2 test of Solvency II. But firms may be warming to new regime. Banks on Swiss standard see marginal capital drop

Spreadsheet errors can cost a firm millions and some banks are still vulnerable – but there are solutions around.

European supervisors deserve high marks for openness, prodigious output and the level of trust established with each other. But bankers reckon that there is still much room for improvement, says Ulrich von Kenne*