Basel III capital requirements on track at world’s top banks

The latest BIS (Bank for International Settlements) Report to G20 Leaders on monitoring implementation of Basel III regulatory reforms indicates that most international banks are on track to meet the capital requirements laid out by the rules well ahead of their implementation deadline in 2019. The study is based on a sample of over 200 banks and there is on-going work to assess capital requirements rules in some jurisdictions to see how they match up to the Basel III requirements.

The report states that, “it is encouraging to note that those jurisdictions that have undergone an assessment of their final rules have so far promptly rectified identified issues and are continuing with regulatory reforms.” The reforms are a key driver in restoration of confidence in the banking sector following the post-2007 financial crises.

Stefan Ingves, chairman of the Basel Committee and governor of Sveriges Riksbank, said: "There has been significant progress in many areas since the last update. Many Committee member jurisdictions now have final Basel III regulations in place. Also, the Committee's regulatory consistency assessment programme is contributing to further convergence of national implementation of the Basel standards.

“These are positive developments that will help build a resilient banking system and improve public confidence in regulatory ratios. Nevertheless, there is more to do. For example, with regard to risk weights, excessive variation across banks has been identified, and the Basel Committee is exploring policy options to reduce that."

The Basel Committee on Banking Supervision comprises of 27 jurisdictions. Of those, only Turkey and Indonesia are yet to submit final Basel III based capital regulations, although draft regulations are in place and should be finalised soon, following on from the June and July final submissions from the EU and USA respectively.

The report also notes that; “Member jurisdictions have made considerable progress since the last report was published in April 2013.” You can read the latest report from BIS here: http://www.bis.org/publ/bcbs260.pdf

Tags: Basel IIIBIS