The Bank for International Settlements doesn't seem to be giving much heed to market participants' cries for changes to its upcoming New Basel Capital Accord.

The Basel, Switzerland, organization is due to publish a draft of the long-awaited proposal by the end of next month. It hinted early this week that the document's securitization provisions won't differ much from earlier rough drafts. The guidelines would change the way banks around the world calculate how much cash to reserve against the structured products they buy and sell - even though market players have repeatedly complained that the resulting capital charges would be far too steep.

And the BIS' refusal to budge has securitization professionals annoyed. "It does not appear they're addressing the industry's main concerns," said Mark Nicolaides, a partner in the London office of law firm Mayer Brown. "It's very disappointing."

Industry players keeping up with "Basel II" are frustrated that they still have a fight on their hands, even as bankers in other areas of the capital markets have managed to wring various concessions from international regulators over the last few months.

Reacting to the Enron scandal and other blowups, the BIS wants to guard against bank failures by replacing the standard capital charges for asset- and mortgage-backed deals with flexible formulas that it claims more-accurately reflect the risk of losses among those transactions.

That would actually reduce the charges tied to top-quality issues, but critics complain the threshold would still be too high. They also worry that low-rated securitizations would incur significantly higher charges than unsecured corporate bonds with similar ratings. "That just doesn't make any sense," one source said.

The BIS has released a description of certain solutions to problems that banks, in general, have raised during five years of talks with its Committee on Banking Supervision. Securitization was barely mentioned in that 11-page report this week, prompting asset-backed players to fear the worst.

As the proposed guidelines stand now, they could ultimately drive up borrowing costs for companies and individuals, since banks would have less power to fund new credits and shed risk associated with their investments. The chief target for complaints is that banks would have to hold cash equivalent to at least 0.56% of their issues and investments, even if new risk weightings determine the reserves should be lower. Industry participants also want to ease the proposed capital charges for lower-rated securitizations, unrated deals, synthetic transactions and liquidity facilities for commercial-paper conduits.

"If these issues aren't solved, it won't kill securitization. But it will certainly slow the growth of it," Mayer Brown's Nicolaides said.

It's still possible that the BIS will surprise everyone by addressing securitization players' criticisms in its upcoming draft. But market players feel that's unlikely, because the committee would have let them know by now.

In fact, the usually responsive committee has "gone radio silent over the last couple months," Nicolaides said. The group appears to be concentrating on simply drafting the proposal and getting it out, with an eye toward making changes later.