Yesterday, the Governors and Heads of Supervision, the oversight body of the Basel Committee on Bank Supervision, announced that it had reached a broad consensus on the overall design of the capital and liquidity reform package. The agreement includes the definition of capital, the treatment of counterparty credit risk, the leverage ratio and the global liquidity standard. In addition, the Governors and Heads of Supervision is planning to finalize the regulatory buffers before the end of this year.

In reaching the broad agreement, the Governors and Heads of Supervision considered comments received during public consultations on the Basel Committee’s proposed reforms, which were published in December 2009. The Basel Committee will issue the details of the capital and liquidity reforms later this year.