On 3 November 2020, the Basel Committee on Banking Supervision (Basel Committee) published a report for G20 leaders at their summit in Riyadh on 21-22 November 2020. The report provides an update on the implementation of the Basel III regulatory reforms and the Basel framework-related measures taken by the Basel Committee in response to the COVID-19 pandemic.
In summary, the report notes that there has been further progress in implementing the Basel III standards in a full, timely and consistent manner. In addition, banks have continued to build capital and liquidity buffers while reducing their leverage. Prior to the impact of the COVID-19 pandemic, large systemically active banks made further progress in meeting fully phased-in final Basel III capital requirements, and their liquidity ratios remained stable compared with end-2018. More recent data, which incorporate the impact of the COVID-19 pandemic, suggest that banks’ capital and liquidity ratios have generally remained stable.
In terms of the Basel III reforms the report notes:
- All member jurisdictions have final rules for risk-based capital, liquidity coverage ratio (LCR) regulations, capital conservation buffers and the countercyclical capital buffers (CCyB) in force.
- All members that are home to jurisdictions to global systemically important banks (G-SIBs) have implemented the Basel framework for G-SIBs and 26 member jurisdictions have final rules in force for their domestic systemically important bank framework.
- All member jurisdictions have issued final or draft rules for the net stable funding ratio.
- 26 member jurisdictions have issued final rules for the leverage ratio.
- 26 member jurisdictions have issued draft or final rules for the standardised approach for measuring counterparty credit risk, the large exposures framework and interest rate risk in the banking book.
- 25 member jurisdictions have issued draft or final rules for the capital requirements for exposures for central counterparties.
- 23 member jurisdictions have issued final rules for the monitoring tools for intraday liquidity management.
- 23 member jurisdictions have issued draft or final rules for the requirements for total loss absorbing capacity holdings and for margin requirements for non-centrally cleared derivatives.
- 22 member jurisdictions have issued final or draft rules for the revised securitisation framework, capital requirements for equity investments in funds and the revised Pillar 3 disclosure requirements.