Federal banking regulators are expected to issue a risk-based capital proposal in the next few weeks that updates the current Basel I capital standard so it is more risk sensitive, particularly for mortgage assets."A revised Basel Ia could include more baskets and a breakdown of particular assets into multiple baskets to take into consideration collateral values, loan-to-value ratios, and credit scores," said Kathleen Marinangel of the America's Community Bankers. Testifying before the House Financial Services panel, Ms. Marinangel also noted that mortgage insurance and guarantees could be incorporated into the updated RBC standard known as Basel Ia. The regulators also are planning to issue a more sophisticated RBC Basel II standard for the largest U.S. banks at the same time they issue the Basel Ia proposal for other U.S. banks. Comptroller of the Currency John Dugan said recently that comment periods for the Basel II and Basel Ia proposals should be overlapping. "Industry participants must be able to compare the two proposals in order to assess competitive effects as they make their comments, because these are concerns that we must take into account before issuing either final rule," Mr. Dugan told the American Bankers Association annual convention.

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