MAS Consults on Implementation of Final Basel III Reforms in Singapore

In the consultation document, MAS sets out its policy proposals for implementation of specific aspects of the Basel III reforms:

• MAS intends to adopt the revised credit risk framework, market risk framework, and operational risk framework with proposals on the exercise of national discretions.
• MAS proposes to adopt the phase-in arrangement of BCBS for the output floor calibration. 
• MAS proposes to require derivative exposures to be measured in the leverage ratio exposure measure, using the modified standardized approach for measuring counterparty credit risk exposures (SA-CCR), from January 01, 2022. This will harmonize the measurement of derivative exposures between the leverage ratio and the risk-based framework, which will improve the effectiveness of the leverage ratio as a backstop to the risk-based capital requirements
• MAS also proposes to allow banks the option to adopt the modified SA-CCR for calculation of their leverage ratio earlier than January 01, 2022, conditional on their simultaneous or prior adoption of the SA-CCR under the risk-based framework. 

Comment Due Date: July 08, 2019

Effective Date: January 01, 2022 (Proposed)

Keywords: Asia Pacific, Singapore, Banking, Basel III, Credit Risk, Market Risk, Operational Risk, Output Floor, Leverage Ratio, Capital Requirements, MAS