BASEL III IMPLEMENTATION DEFERRED UNTIL 2023 IN RESPONSE TO COVID-19

On Friday it was announced that the Implementation date of the remaining Basel III standards, which were due to come into force in January 2022, will be delayed by a further year, giving a new implementation date of 1 st January 2023.

The Basel Committee’s Oversight body, the Group of Central Bank Governors and Heads of Supervision (GHOS) endorsed a number of measures to provide banks and supervisor’s additional operational capacity to respond to the global financial and economic impact caused by Covid-19.

“Today’s measures will free up operational capacity for banks and supervisors as they respond to the economic impact of Covid-19.”, said Pablo Hernández de Cos, Chairman of the Basel Committee and Governor of the Bank of Spain. “The Committee will continue to closely monitor the impact of Covid-19 on banks and supervisors and respond as necessary in coordination with the Financial Stability Board and other standard-setting bodies on cross-cutting issues.”

The measures backed by the GHOS will defer the implementation timelines of all remaining Basel III standards until January 2023, including the revised:

• leverage ratio and G-SIB buffer
• standardised approach for credit risk
• IRB approach for credit risk
• operational risk framework
• CVA framework
• market risk framework
• Pillar 3 disclosure requirements

In spite of the current uncertainty surrounding Covid-19, and the delays announced to the Basel III framework, GHOS members have unanimously reaffirmed their expectation of full, timely and consistent implementation of all Basel III standards on this revised timeline.

Vermeg will continue to monitor any ongoing regulatory change.

The full press release can be found here: https://www.bis.org/press/p200327.htm

JONATHAN CARDWELL
PRODUCT CONSULTANT