GovernanceRegulationConsolidated Basel III standards published

Consolidated Basel III standards published

The reorganisation announced by BCBS saw the entire accord transferred from a lengthy series of PDFs into a more easily navigable web-based format.

The Basel Committee on Banking Supervision (BCBS) has published a consolidated version of the Basel III framework in an attempt to round up the myriad provisions published over the course of almost 10 years.

The draft, web-based version is now available on the Bank for International Settlements’ website. The earlier publication format was difficult for website users to find the standards that are currently in force, or track how the framework has developed over time.

The amendments broadly introduce clarifications in areas such as calculations of output floors up to 2022, buffers, internal modelling and standardised approaches, operational risk, the leverage ratio and Pillar 2 requirements.

The Basel Committee said: “As the technical amendments proposed in the consultative document are not substantial in nature and, in the committee’s view, contribute to a more coherent prudential framework, the committee will encourage its members to implement the final requirements as soon as possible, and no later than January 1, 2022.”

The Basel Framework

The consolidated framework aims to improve the accessibility of the Basel Committee’s standards and to promote their consistent global interpretation and implementation. The membership of the BCBS has agreed to fully implement these standards and apply them to the internationally active banks in their jurisdictions.

The publication of the standards in the new format has focused on reorganizing existing requirements, not introducing new ones. However, the preparation of the framework did reveal certain inconsistencies between Basel requirements. Additionally, there are ambiguities that need to be addressed through minor policy changes. The framework has been published initially in draft form, together with a consultative document to gather feedback on the website and on various proposed technical amendments to the standards.

A tutorial explains the features of the Basel Committee’s new consolidated framework, bringing global standards for bank regulation and supervision together in one place.

The Committee welcomes comments on the accuracy and clarity of the consolidated framework, and on the proposed technical amendments to the standards.

The web-based format provides a more flexible platform to keep track of the many updates to the 14 overarching standards. These standards include:

  1. Scope and definitions
  2. Definition of capital
  3. Risk-based capital requirements
  4. Calculation of RWA for credit risk
  5. Calculation of RWA for market risk
  6. Calculation of RWA for operational risk
  7. Leverage ratio
  8. Liquidity Coverage Ratio
  9. Net stable funding ratio
  10. Large exposures
  11. Margin requirements
  12. Supervisory review process
  13. Disclosure requirements
  14. Core Principles for effective banking supervision

Primary global standard setter

Located at the Bank for International Settlements (BIS) in Basel, Switzerland, BCBS is an international committee that provides frameworks for regulation of banks, and allows for regular cooperation on banking supervisory matters. BCBS’ regulations are not binding on its 45 member banks, instead it sets banking standards by recommending policy solutions. Its members comprise central banks and bank supervisors from 28 jurisdictions.

Few of its publications this year have been the Basel III Monitoring Report, and a survey on proportionality in bank regulation and supervision.

Its mandate is to strengthen the regulation, supervision and practices of banks worldwide with the purpose of enhancing financial stability.

Canada’s Carolyn Rogers is to take over as secretary-general of the Basel Committee on Banking Supervision, from August 14.

Related Articles

Regulators swoop on Facebook's currency plans

Blockchain Regulators swoop on Facebook's currency plans

8h Jay Ashar
Cross-border payment partnership announced by MoneyGram and Ripple

Blockchain Cross-border payment partnership announced by MoneyGram and Ripple

10h Jay Ashar
Tapping into the Alternative Investment Market (AIM)

Investment & Funding Tapping into the Alternative Investment Market (AIM)

13h Nash Riggins
HSBC rolls out digital accounts receivable tool

Automation HSBC rolls out digital accounts receivable tool

1d Jay Ashar
Is it time for corporates to embrace ISO 20022?

Blockchain Is it time for corporates to embrace ISO 20022?

1d Ben Buckingham
Tackling the treasury skills shortage

Automation Tackling the treasury skills shortage

2d Austin Clark
BoE, FCA, and MAS to collaboration on cybersecurity

Cyber Security & Fraud BoE, FCA, and MAS to collaboration on cybersecurity

2d Jay Ashar
SWIFT calls for greater harmonization in FX standards

Automation SWIFT calls for greater harmonization in FX standards

5d Jay Ashar

Whitepapers & Resources

Are You Ready to Implement your GRC Solution?

Are You Ready to Implement your GRC Solution?

2m
Enhancing your strategic position: Digitalization in Treasury

Payments Enhancing your strategic position: Digitalization in Treasury

4w
Netting: An Immersive Guide to Global Reconciliation

Netting: An Immersive Guide to Global Reconciliation

4m
Sanction Screening: The risk for companies is real

Payments Sanction Screening: The risk for companies is real

3w