The Bank for International Settlements gave the United States a “largely compliant” overall score in assessing its roll-out of the Basel capital framework for banks. The assessment was limited solely to evaluating the “consistency and completeness” of US regulations compared to Basel’s minimum requirements. BIS found that 11 of 13 components of the US capital framework “comply or largely comply” with Basel requirements. Two areas that were materially non-compliant were the so-called “securitization framework” and the “standardized approach to market risk.” In general, acknowledged BIS, US banks follow a securitization framework that is generally more conservative than Basel standards (under this framework banks must hold a certain amount of regulatory capital against securitized exposures). However, the US regime is different because, under US law, banks are prohibited from using third party ratings to assess risk. As a result, for some US banks, the US framework results in lower capital requirements than under the Basel requirements. Likewise, US measures of market risk only have adopted portions of the standardized Basel model. For securitized exposure, for example, US rules continue to allow capital requirements to be based on the maximum of capital requirements against long or short positions rather than the aggregate of both as required under Basel III. By comparison, the regulatory framework of the European Union and its nine member states, which are also members of the Basel committee, received a “material non-compliant” score from BIS related to their compliance with the Basel framework. This is because at least two key requirements were found to be non-compliant (one related to the internal approach for assessing credit risk, and the other, regarding the EU’s counterparty credit risk framework). The nine EU countries are: Belgium, France, Germany, Italy, Luxembourg, the Netherlands, Spain, Sweden and the United Kingdom.