have arisen as foreign banks have entered u. s. markets and as u. s. banks have established operations in other jurisdictions. the united states is working to complete its national - standard - setting process, as we recognize that the lack of a final rule creates uncertainty, for both banks and foreign supervisors, about exactly what will be required. at the same time, we have been working with our colleagues on the basel accord implementation group ( aig ) for the past few years to identify issues arising from differences in national standards of the basel ii framework. all of the supervisory bodies participating in the aig effort are committed to making the transition to basel ii successful. we have heard from some bankers that they are concerned about home - host issues. many of the issues are institution specific, and all the u. s. banking agencies encourage regular meetings between bankers and supervisors to identify specific concerns. these meetings are also an opportunity for bankers to make supervisors aware of their individual bank ’ s implementation plans and progress, and for supervisors to make bankers aware of current supervisory expectations with respect to those banks. indeed, the meetings we have had to date to discuss the draft npr have provided us with useful information about how our proposals are being interpreted and perceived. we continue to ask for details about concerns bankers may have about cross - border implementation ; it is a great help, as we work on our proposals, to hear your specific issues. we were pleased that at a few recent meetings, bankers did, in fact, provide some very specific information about how possible differences in implementation could generate extra burden and affect the way in which the bankers conduct their business. suggestions for changes to our proposals that are specific, detailed, and supported by facts will allow us, in drafting the final rule, to more clearly identify alternative solutions to the issues raised. of course, all basel - member countries have their own rollout timelines and their own ways of addressing matters that are left to national discretion under the accord, which is entirely appropriate. so while the united states appears to be a bit of an outlier with respect to its implementation timetable, other countries are grappling with their own challenges, too. as you know, a number of other countries plan to implement the full set of basel ii approaches for credit risk ( standardized, foundation irb, and advanced irb ) and operational risk ( basic indicator, standardized, and the advanced measurement approaches ), with all but the advanced approaches expected to be implemented next year in many basel

the existing basel i regulatory capital rules for non - basel ii institutions. we expect only one or two dozen banks to move to the u. s. version of basel ii in the near term, meaning that the vast majority of u. s. banks will continue to operate under basel i, which will be amended through a separate rulemaking process. the basel i framework has already been amended more than twenty - five times in response to changes in banking products and the banking environment and as a result of a better understanding of the risks of individual products and services. the u. s. agencies believe that now is another appropriate time to propose modifications to basel i rules. the agencies have issued an advance notice of proposed rulemaking discussing possible changes to increase the risk sensitivity of u. s. basel i rules and to mitigate any competitive distortions that might be created by introducing basel ii. we are now in the process of reviewing comments on the advance notice and working on a notice of proposed rulemaking. we are mindful that within the current structure of the basel i rules, amendments to those rules should not be too complex or too burdensome for the large number of banks to which the revised rules will apply. with regard to both the basel ii proposals and the proposed basel i amendments, we understand the need for full transparency. for that reason, we expect to have overlapping comment periods for the basel ii npr and the npr for the proposed basel i amendments. in fact, we want all interested parties to compare, contrast, and comment on the two proposals in overlapping timeframes. accordingly, our proposals could change as a result of comments received or new information gathered. cross - border implementation of basel ii as i noted earlier, each country must implement basel ii as appropriate for its particular jurisdiction. to that end, the u. s. banking agencies are acting to ensure that the basel ii framework is implemented in the united states in a prudential manner. we recognize that the adoption of differing approaches to basel ii by various countries may create challenges for banking organizations that operate in multiple jurisdictions. it is good to remember that cross - border banking has always raised specific challenges that supervisors from various countries have worked hard to address. let me assure all bankers here that supervisors are aware that the process of changing to new national versions of basel ii has heightened concerns about home - host issues. the federal reserve and other u. s. agencies have, for many years, worked with international counterparts to limit the difficulty and burden that