December 2009, the Basel Committee on Banking Supervision (“BCBS”) published its documents on “Strengthening the resilience of the banking sector” and the “International framework for liquidity risk measurement, standards and monitoring” (collectively “Basel Proposals”). The Basel Proposals addresses shortcomings in the Basel II capital framework, such as flaws in the definition of capital that compromise market discipline and pro-cyclicality, which helped amplify financial shocks. The Basel Proposals are intended to “promote a better balance between financial innovation, economic efficiency, and sustainable growth over the long run.” They have drawn criticism from bankers and national regulators who have expressed concerns that BCBS is pushing ahead too quickly under political pressure from G20 leaders, and that the new rules may unduly curtail banks’ lending capacity. Interested parties should provide comments by April 16, 2010. BCBS has stated that it plans to issue, by the end of 2010, a fully calibrated, comprehensive set of proposals, which banks will then be given time to implement in “phases” by December 31, 2012. Please click here to read our client alert.