New Group Seeks Clout in Basel Rulemaking

Thirty-two of the world's leading commercial bankers have agreed to work together to influence capital rules being crafted by the Basel Committee on Banking Supervision.

Coordinated by the Institute of International Finance, these bankers are to hold their first meeting Sept. 24 in New York. The group, chaired by Jan Kalff, chairman of ABN Amro Bank NV, Amsterdam, supports updating capital standards, which were first issued in 1988.

But they say they want to ensure that international regulators do not issue rules that interfere with the sophisticated systems these banks use to set internal capital levels.

"The final decisions that are taken by the Basel Committee will have a profound effect on the soundness of the global banking system," Sir John Bond, chairman of the Institute of International Finance and of HSBC Holdings Inc., said in a statement. "It is important that any changes are consistent with the realities of global banking."

Revisions to international capital rules have been in the works for several years, and the Basel Committee issued a formal proposal on June 3. International regulators are considering allowing banks to use internal models to set capital standards.

More broadly, the proposal would base regulatory capital on the creditworthiness of a bank's borrowers as determined by such rating agencies as Standards & Poor's Corp. Currently, capital requirements are tied to the riskiness of a bank's assets.

U.S. bankers on the Institute of International Finance committee include: Peter Gallant, group treasurer at Citigroup; J. Chandler Martin, an executive vice president at Bank of America Corp.; Robert Strong, chief credit officer at Chase Manhattan Bank; and Richard Wade, chief risk-management officer at Bank One Corp. -- Barbara A. Rehm