Alert December 22, 2009

Basel Committee Proposes Strengthened Capital and Liquidity Regulations

The Basel Committee on Banking Supervision (the "Basel Committee") issued two papers entitled: (i) Strengthening the Resilience of the Banking Sector and International Framework for Liquidity Risk Measurement, Standards and Monitoring (the "Papers") designed to strengthen global capital and liquidity regulation. The Papers, among other things, propose the use of a global leverage ratio, a strengthened definition of core capital and new standards for monitoring liquidity risks. The Basel Committee requested that comments on the Papers be submitted by April 16, 2010, and the FRB, FDIC, OCC and OTS, which are members of the Basel Committee, issued releases encouraging financial institutions to submit comments on the Papers. The Basel Committee stated that it did not expect that the requirements suggested in the Papers would be implemented for a number of years, and only after the banking industry has recovered from the current global economic crisis.