The Basel Committee on Banking Supervision (BCBS) published the progress report on adoption of the Basel III regulatory framework in member jurisdictions. The report sets out the jurisdictional adoption status of the Basel III standards as of the end of September 2021. This includes the Basel III post-crisis reforms published by BCBS in December 2017 and the finalized minimum capital requirements for market risk published in January 2019. Since the previous report in July 2020, member jurisdictions have made further progress in implementing standards, especially those whose deadlines have passed, despite the disruptions resulting from COVID-19 pandemic and the required shift in regulatory and supervisory priorities.
The report highlights that all jurisdictions now have final rules in force for the countercyclical capital buffer (CCyB). In respect of the outstanding capital standards, there have been eleven new adoptions. This includes three additional jurisdictions (Australia, Mexico, and US) that have adopted the final rules with regard to total loss-absorbing capacity (TLAC); two additional jurisdictions (Russia and South Africa) that have adopted final rules for standardized approach for measuring counterparty credit risk exposure (SA-CCR) and capital requirements for equity investments in funds; and four additional jurisdictions (Switzerland, Japan, Mexico, and US) that have adopted the net stable funding ratio (NSFR) standard. There have been seven additions across the disclosure parts of the framework too, in addition to the new adopters of the revised operational risk framework and the revised standardized approach for credit risk. The report excludes standards that have been already implemented by all jurisdictions, such as the liquidity coverage ratio (LCR) and the capital conservation buffers.
Further evaluation of the consistency of jurisdictional implementation is addressed through the Regulatory Consistency Assessment Program (RCAP) assessments. The outstanding RCAP on the net stable funding ratio and large exposures framework are expected to resume soon, as they were suspended last year in response to the COVID-19 pandemic. The report is complemented by a newly developed dashboard to reflect the full history of Basel III implementation and provide an overview of the progress up to date. The dashboard will be updated regularly and is intended to replace the existing report publications.
Keywords: International, Banking, Basel, Progress Report, CCyB, Large Exposures, Credit Risk, Market Risk, Operational Risk, Regulatory Capital, NSFR, SA-CCR, RCAP, COVID-19, BCBS
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Previous ArticleACPR Implements Updates Related to DPM Version 3.1
The Australian Prudential Regulation Authority (APRA) found that Heritage Bank Limited had incorrectly reported capital because of weaknesses in operational risk and compliance frameworks, although the bank did not breach minimum prudential capital ratios at any point and remains well-capitalized.
The Office of the Superintendent of Financial Institutions (OSFI) released the annual report for 2020-2021.
The Australian Prudential Regulation Authority (APRA) released the final Prudential Practice Guide on management of climate change financial risks (CPG 229) for banks, insurers, and superannuation trustees.
The European Banking Authority (EBA) Single Rulebook Question and Answer (Q&A) tool updates for this month include answers to 10 questions.
The European Commission (EC) has adopted a package of measures related to the Capital Markets Union.
The European Council adopted its position on two proposals that are part of the digital finance package adopted by the European Commission in September 2020, with one of the proposals involving the regulation on markets in crypto-assets (MiCA) and the other involving the Digital Operational Resilience Act (DORA).
The Prudential Regulation Authority (PRA) is proposing, via the consultation paper CP21/21, to apply group provisions in the Operational Resilience Part of the PRA Rulebook (relevant for the Capital Requirements Regulation or CRR firms) to holding companies.
The Board of Governors of the Federal Reserve System (FED) published a report that summarizes banking conditions in the United States, along with the supervisory and regulatory activities of FED.
The European Banking Authority (EBA) published the final report on draft regulatory technical standards for the calculation of risk-weighted exposure amounts of collective investment undertakings or CIUs, in line with the Capital Requirements Regulation (CRR).
The Australian Prudential Regulation Authority (APRA) recently completed two pilot initiatives in its 2020-2024 Cyber Security Strategy, which was published in November 2020.