03 November 2020

BIS: Implementation of Basel standards - A report to G20 Leaders on implementation of the Basel III regulatory reforms

Overall, further progress has been made since last year 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.

This report updates G20 Leaders on progress by the member jurisdictions of the Basel Committee on Banking Supervision (BCBS) in implementing the Basel III regulatory reforms.1 It is the 10th such report,2 and summarises the outcomes of the Committee’s Regulatory Consistency Assessment Programme (RCAP). The RCAP: (i) monitors members’ progress in adopting the Basel III standards; (ii) assesses the consistency of domestic (national or regional) banking regulations with the Basel III standards; and (iii) analyses the prudential outcomes of those regulations.

Overall, further progress has been made since last year 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 Covid-19, large internationally active banks made further progress towards 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 Covid-19, suggest that banks’ capital and liquidity ratios have generally remained stable.

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 Basel Committee. The key components, including the risk-based capital standards and the Liquidity Coverage Ratio (LCR), are now enforced by all member jurisdictions. Further, most of the member jurisdictions have final rules in place for other 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, and many jurisdictions have faced delays in implementing some standards based on the agreed timelines....

Full article

© BIS - Bank for International Settlements