Survey reveals regulatory divergence in treatment of hybrid capital. Some call for harmonisation. Market solutions also posed - By Melvyn Westlake

It is doubtful that Japan banks will be ready for advanced risk options in 2008. They must overcome daunting data problems.

International securities body keeps focus on hedge funds. Germany and Britain seek agreed approach. But US is wary - By Melvyn Westlake

Concern over the potential risks posed by hedge funds is expressed by the European Central Bank (ECB) in its latest Financial Stability Review published at the beginning of June. It identifies two areas of particularly worrying risk. First, the possibility of tighter global liquidity conditions in the period ahead has raised investor Concern over the potential risks posed by hedge funds is expressed by the European Central Bank (ECB) in its latest Financial Stability Review published at the beginning of June.

Regulators are carefully steering their Basel II plans through an obstacle-strewn course. Charges of conservatism could help - By David Keefe

WASHINGTON – Financial industry associations are welcoming the extensive revisions that regulators have made to their guidance to firms involved in complex structured finance transactions (CSFTs).

WASHINGTON – An aspect of the new Basel capital rules receiving increased attention by US regulators since their latest test run of the proposed regime is the likelihood that it will cause bank capital to become much more volatile.

BRUSSELS – A top insurance regulator called in June for reform of the leading international forum for insurance supervisors possibly, but not necessarily, along the lines of the more compact Basel Committee for Banking Supervision.

WASHINGTON – US banks not adopting Basel II should have the option of retaining the existing Basel I capital rules if they prefer, the head of the federal agency that supervises America’s savings and loans industry said in late May.

WASHINGTON – Jaime Caruana, who steps down as chairman of the Basel Committee in July, has been appointed to a senior post at the International Monetary Fund (IMF) in Washington, the agency dealing with global stability, and exchange rate and balance of payments issues. IMF managing director Rodrigo de Rato, announced in early June that Caruana was being appointed Counsellor and Director of a new IMF department that will be responsible for all aspects of the Fund’s financial, capital market, and monetary work.