The Basel Committee on Banking Supervision, under the auspices of the Bank for International Settlements (BIS), offered proposals last week to revamp current international bank capital requirements, including a significant reduction in the risk weighting for high-quality corporate paper.

The BIS's 62-page report seemed to offer both good and bad news for the mortgage market. The good news was, contrary to market-wide rumors early last week, the BIS did not recommend that current 0% risk weightings for Ginnie Mae bonds be increased to become more like those for Fannie Mae and Freddie Mac bonds, which currently have a risk weighting of 20%.

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