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    BCBS Defers Implementation of Final Basel III Standards by One Year

    March 27, 2020

    BCBS has announced deferral of the implementation date of the final Basel III standards by one year, to January 01, 2023. The Group of Central Bank Governors and Heads of Supervision (GHOS), which is the oversight body of BCBS, has endorsed this set of measures to provide additional operational capacity for banks and supervisors to respond to the immediate financial stability priorities resulting from the impact of COVID-19 on the global banking system.

    Basel Standard

    Original Implementation Date

    Revised Implementation Date

    Revised leverage ratio framework and G-SIB buffer

    January 01, 2022

    January 01, 2023

    Revised standardized approach for credit risk

    January 01, 2022

    January 01, 2023

    Revised internal ratings-based approach for credit risk

    January 01, 2022

    January 01, 2023

    Revised operational risk framework

    January 01, 2022

    January 01, 2023

    Revised credit valuation adjustment framework

    January 01, 2022

    January 01, 2023

    Revised market risk framework

    January 01, 2022

    January 01, 2023

    Output floor

    January 01, 2022-January 01, 2027

    (transitional arrangements)

    January 01, 2023-January 01, 2028

    (transitional arrangements)

    Revised Pillar 3 disclosure framework

    January 01, 2022

    January 01, 2023

     

    These standards were finalized with the objective of complementing the initial set of Basel III standards. The revised timeline is therefore not expected to dilute the capital strength of the global banking system, but will provide banks and supervisors additional capacity to respond immediately and effectively to the impact of COVID-19. GHOS members unanimously reaffirmed their expectation of full, timely, and consistent implementation of all Basel III standards based on this revised timeline. Once again, the current events demonstrate the importance of a resilient financial system, which these reforms will help further reinforce.

     

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    Keywords: International, Banking, Basel III, Market Risk, Credit Risk, CVA Risk, Output Floor, Disclosures, Pillar 3, Operational Risk, Leverage Risk, COVID-19, BCBS

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