Thursday, 29 July 2021

Basel Committee reports to G20 Leaders on Basel III implementation

The Basel Committee on Banking Supervision has today published a report for the G20 Leaders at their Summit in Riyadh on 21-22 November. The report is an update on the implementation of Basel III regulatory reforms and the Basel Framework-related measures taken by Basel Committee members in response to Covid-19.

The Committee observes that further progress has been made since last year towards the implementation of Basel III standards in a full, timely and consistent manner. Most member jurisdictions have final rules in place for Basel III standards, including those relating to the Net Stable Funding Ratio (NSFR), the leverage ratio, the standardised approach for measuring counterparty credit risk (SA-CCR) and the supervisory framework for measuring and controlling large exposures (LEX). However, final rules for some standards have not yet come into force in some jurisdictions.

The Committee further notes that most Basel Framework-related measures taken by its members in response to Covid-19 have been capital or liquidity-related, with the primary objective to support banks' ability to continue lending and providing liquidity to the real economy. Most measures make use of the flexibility embedded in the Basel Framework, while most other measures taken over and above this flexibility are temporary in nature.

The Committee reiterates its expectation of full, timely and consistent implementation of all Basel III standards based on the revised timeline endorsed by the Basel Committee's oversight body, the Group of Governors and Heads of Supervision (GHOS), in March 2020.

The Committee will continue to monitor the implementation and evaluate the impact of its standards and regularly report to the G20 on progress. It will also continue to monitor the regulatory and supervisory measures taken by its members in response to Covid-19, including the use of flexibility and consistency of these measures with the Basel Framework.

Re-disseminated by The Asian Banker