BCBS Report Examines Progress on Adoption of Basel III Framework
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.
Related Links
Keywords: International, Banking, Basel, Progress Report, CCyB, Large Exposures, Credit Risk, Market Risk, Operational Risk, Regulatory Capital, NSFR, SA-CCR, RCAP, COVID-19, BCBS
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Nick Jessop
Scenario modeling expert; risk management specialist; quantitative financial modeler
Previous Article
ACPR Implements Updates Related to DPM Version 3.1Related Articles
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
BIS Bulletin Examines Cognitive Limits of Large Language Models
The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.
ECB is Conducting First Cyber Risk Stress Test for Banks
As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.
EBA Continues Momentum Toward Strengthening Prudential Rules for Banks
A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.
EU and UK Agencies Issue Updates on Final Basel III Rules
The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards