SENIOR international financiers, including Sir Andrew Large, the Deputy Governor of the Bank of England, yesterday rounded on a controversial attempt to modernise banking regulations.

Jerry Hawke, the US regulator, said that rules proposed under the new Basle II framework would be simplified and modified, before being applied to American banks. He also said the proposed new rules reflected “much more a commitment to prescriptiveness than a mere recognition of the complexity of banking business”.

Analysts said the statement effectively signalled that the US would turn its back on the rules, designed to set out how much capital banks should set aside to cushion themselves against unexpected losses.

Sir Andrew also questioned the viability of the proposals, suggesting some regulators may not be sophisticated enough to apply the rules. “At a global level I detect a deficit of expertise which will require to be remedied,” he said.

Mr Hawke, the US Comptroller of the Currency, was speaking in London to an audience of bankers, regulators and professional advisers at the Centre for the Study of Financial Innovation. Mr Hawke said the complexity of the proposals will make them too expensive and could also “have a cost in terms of credibility and public acceptance”.

His outburst follows mounting criticism of Basle II, which has been in gestation for at least five years and is two years behind schedule. It has also been estimated that implementation of the rules will cost large banks between $70 million and $100 million each.