May 09, 2018

EC launched a consultation to seek input from stakeholders on the impact of recent amendments to the Basel III framework. This is an exploratory consultation seeking first views on the last piece of Basel III banking regulatory reform, which was agreed by BCBS in December 2017. This consultation is not linked to a legislative proposal. Stakeholders must use the accompanying questionnaire to send their feedback. Comments are due by April 12, 2018 and EC has received 56 responses to the consultation.

The consultation aims to gather views from interested parties on the potential impact that amendments may have on the EU banking sector and the wider economy, in addition to highlighting possible implementation challenges. The implementation of this agreement in the EU would require amendments to current banking regulations, particularly the Capital Requirements Regulation or CRR. The amendments in the BCBS Basel III finalization package of December 2017 include revisions to the standardized approach for credit risk, revisions to the internal ratings-based approaches for credit risk, minimum haircut floors for non-centrally cleared securities financing transactions, an overhaul of the credit valuation adjustment framework, a new standardized approach for operational risk, and replacement of the "Basel II" floor with an aggregate more risk-sensitive output floor. Before considering the related amendments to current banking regulations, EC will perform a thorough impact assessment, in accordance with its Better Regulation agenda. The results of this consultation will inform the overall assessment of EC.

 

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Keywords: Europe, EU, Banking, Basel III Finalization, Impact Assessment, CRR, Responses to Consultation, EC

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