current review and study is consistent with our historical position at basel. implementation efforts in the united states the u. s. banking agencies are grateful to the institutions that voluntarily participated in the qis4 exercise, from which we received valuable information. in a statement issued on april 29, 2005, the u. s. banking agencies indicated that the minimum regulatory capital charges resulting from qis4 were more variable across institutions and these capital charges dropped more in the aggregate than the agencies had expected. this was the impetus for deciding to delay issuance of our next round of proposals for basel ii. the agencies'reaction to the qis4 results should signal how seriously we are taking the basel ii effort and how we are striving to implement it correctly. these somewhat unexpected results show the continued benefit of conducting periodic quantitative impact studies. they serve as a milestone to help us evaluate progress as we move to basel ii. we now must determine the reasons for the results from qis4. were there limits to the qis4 exercise? is there a need for adjustments to the basel framework itself? do the qis4 results reflect actual differences in risk among respondents when prior supervisory information suggested more similarity in credit quality? do the results indicate the various stages of preparedness among participants, especially relating to data availability? none of the participating banks have completed their databases and models for all of their risk areas. in some cases, this created results that could not be relied upon in the implementation of basel ii. for example, for some portfolios, losses reflected only the last year or two of results. thus, the strong credit performance of recent experience was not balanced by higher losses at other points in the credit cycle. analysis of the data used in qis4 is vitally important, because the ultimate success of basel ii will depend on the quantity and quality of data that banks have to use as inputs to the framework. and as i noted before, these data are fundamental to the proper management of risks at large complex institutions, even outside the realm of regulatory capital. although the agencies have decided to delay the next round of proposals, we remain committed to basel ii. indeed, we continue to recognize that we must give institutions as much information as possible to help them with their preparations. and we have sought to provide helpful information to institutions as soon as it becomes available - for example, the draft supervisory guidance documents that are now under development. so far, the agencies have issued draft guidance for the advanced measurement approaches for

a minimum regulatory ratio ; it is an ongoing process to help banks implement new technologies and risk - management techniques, to align capital with risks, to foster a level playing field internationally especially given the increasing integration of banking and financial markets worldwide - and to ensure a capital cushion that is adequate and promotes financial stability. the basel ii framework and the relationships among supervisors and bankers that have helped to advance capital reform should provide a process to encourage bankers and supervisors to adapt their procedures and techniques over time. the u. s. banking agencies are working diligently on basel ii implementation. the qis4 results, however, have given us reason to pause before releasing our next round of proposals. the agencies will continue to provide as much information as possible to help institutions make their decisions about implementation - both those institutions that are required to adopt basel ii and those that may opt in. throughout the process, our supervisory teams stand ready to discuss basel ii issues with all institutions and answer any questions that arise.