In early October it looked as if the plans to reform the Basel Accord 1988 might collapse amid acrimony between the US and Europe. However, the process was saved and is now back on track, albeit on a delayed timeframe in respect of publication of the final paper (now due in mid-2004). Banks are again concentrating their minds on the potential effects.
In short, everybody knows that the pricing dynamics will change – but nobody is too sure what the results will be. Retail banks will probably be in a stronger position; the securitisation market in a more uncertain one.
