Risk-Based Capital Standards: Advanced Capital Adequacy Framework - Joint notice of proposed rulemaking (No. 2006-33), Meeting Summary (Osterloh), Washington, DC

Basel IIOffice of Thrift Supervision (OTS)General Information

IIB and ABN AMRO discussed the following issues related to the United States' implementation of the Accord in the Basel II NPR published on September 25, 2006, and the European Union's implementation of the Accord in its Capital Requirements Directive (CRD):

Definition of default.

Commenters noted that the EU and US definitions of default are significantly different. For example, the US considers a wholesale obligor to be in default if any wholesale exposure has been placed in a non-accrual status consistent with the Call Report or Thrift Financial Report Instructions. By contrast, the EU considers a wholesale obligor to be in default when the bank makes a determination that the borrower is unlikely to pay its credit obligations to the credit institution in full without recourse by the credit institution to actions such as realizing collateral.

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