The Basel Committee on Banking Supervision (BCBS) has published a report that is intended to update G20 leaders on progress by its members on implementing the Basel III reforms.
The report notes that overall, further progress has been made since last year’s update to the G20 leaders in implementing the Basel III standards in a full, timely and consistent manner. Also, banks continue to build larger and better-quality capital and liquidity buffers while reducing their leverage.
The report also notes that the Basel III standards for capital, liquidity and global systemically important banks (G-SIBs) have generally been transposed into domestic regulations within the time frame set by the BCBS. The key components, including the definition of capital, the capital conservation buffer and the liquidity coverage ratio (LCR), are now enforced by all member jurisdictions. Also, member jurisdictions continue with their efforts to adopt other Basel III standards, including those relating to margin requirements for non-centrally cleared derivatives, the net stable funding ratio (NSFR), the leverage ratio and the revised Pillar 3 disclosure requirements.
However, the report also states that challenges remain. In particular regarding the timely regulatory adoption of some standards. Consistent with last year’s report, domestic rules on the standardised approach for measuring counterparty credit risk, capital requirements for exposures to central counterparties and capital requirements for equity investments in funds are delayed in many jurisdictions. In addition, a number of Basel standards remain due to be transposed into domestic regulations over the next couple of years, including those on market risk capital requirements, as well as limits on large exposures and securitisation.
View Implementation of Basel Standards, 4 July 2017