from all of our efforts suggest that we look to be on track in meeting our primary goals. that is, not to introduce large changes in the aggregate amount of capital currently held in the banking system while at the same time to provide tangible incentives for banks to adopt the most advanced and sophisticated approaches to capital adequacy. as we near completion of the new accord, i am reminded that the tremendous progress we have made is a reflection of the steadfast commitment that so many have put forth to see the revision process through to its completion. the success of the new accord will be directly attributable to the enormous support and assistance provided by both bankers and supervisors. yet a chinese proverb reminds us that, " on a journey of one hundred miles, ninety is but halfway. " i suppose the last miles of any marathon are the toughest to finish. the wisdom of that proverb is borne out by the critical nature of the tasks ahead of us to complete, and then to implement, the new capital framework. adopting the new accord will be a challenging but also an exciting undertaking for us all. the potential benefits are many - including improving the management of risk, enhancing transparency and promoting greater financial stability. in short, this new framework will make all of us - bankers, supervisors and others - better at what we do. thank you very much.

manage themselves appropriately. likewise, the new framework is providing supervisors with an opportunity to enhance their ability to identify and respond to sources of banking risk, and to share this knowledge within the supervisory community. the basel committee was established precisely to maintain an open and constructive dialogue among banking supervisors. this spirit of communication will be more crucial than ever as the new framework is adopted across national jurisdictions. to help ensure that market competition is driven by each bank ’ s strengths, rather than by differences in each country ’ s regulatory capital rules, the committee established the accord implementation group. this group, comprised of senior line supervisors, is responsible for promoting the consistency and quality of implementation of the new accord. further, the group has been established to facilitate the exchange of information among national supervisors about bank and supervisory practices. this is something that i view as being critical to successful implementation of the new accord. ( b ) challenges for banks within the united states, supervisors have long considered how the new framework will apply to our banks. recently, our efforts have focused on the preparations and challenges ahead for some of the largest u. s. banks as they look towards implementing the irb approach to credit risk. among other important topics, the dialogue has focused on application of the minimum standards for entry and ongoing use of the irb approach. our sense from this interaction is that banks have both the desire and commitment to continue to develop their internal ratings systems in a manner consistent with the ideals embodied in the irb framework. the discussions with the industry have also highlighted a number of areas where banks may need to expand their efforts in preparing for implementation. these include the design and structure of rating systems ; the availability and quality of credit data ; and the role of corporate governance in evaluating bank assessments. i will touch on each of these in turn. rating system design the design of a risk rating system is key to its effectiveness. the basel committee believes that banks ’ internal rating systems should accurately and consistently differentiate between degrees of risk. the minimum irb standards in this area build on leading risk management practices observed in the industry. for example, many organizations either already have, or are in the process of developing, a ratings system that captures both the risk of borrower default, as well as transaction - specific factors that shed light on the amount that could be collected if things were to go poorly. in other words, these banks ’ systems are generally oriented to capturing the essential components in estimating credit risk. as the methods for measuring credit risk improve