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Banks are calling on federal agencies to revamp and delay implementation of a package of proposals that will transform financial regulation.
October 26 -
U.S. regulators are making significant progress in implementing Basel III, according to a scorecard released Monday by the Basel Committee on Banking Supervision. But the EU received a worse grade.
October 1 -
The Basel Committee on Banking Supervision said it discovered deficiencies among the 27 member countries in how they were adopting Basel III.
June 11
WASHINGTON -- Eight of the more than two dozen countries involved have adopted a package of capital and liquidity rules known as Basel III, according to the latest progress report by the Basel Committee on Banking Supervision.
Ahead of a meeting of leaders of the Group of 20 nations next month, the Basel Committee released its fourth status report this week, specifying how much progress had been made by the 27-member body, which agreed to a non-binding plan designed to strengthen capital standards for globally active banks.
Countries are expected to begin adopting the rules on Jan. 1, but will have a series of phase-in periods to gradually comply with the entire batch of requirements by 2019. Banks were given a lengthier period of time in order to comply with the higher standards.
Provisions such as liquidity requirements, a mandatory leverage ratio and a systemic capital surcharge will be phased in starting in 2015.
So far, only eight member countries have issued their final set of Basel III related regulations, including Australia, China, India, Japan, and Switzerland.
Seventeen other countries – including the United States and the European Union – have published draft rules, which have not yet been finalized, while another two remaining countries are still in the process of writing their Basel III rules.
In the U.S., regulators are currently combing through hundreds of letters on the draft proposal after extending the comment period by an additional 45 days to Oct. 22.
The Basel Committee urged countries to adhere to deadlines, especially those with global systemically important banks. Currently, there are 29 institutions that have been named as G-SIBs, eight of which are U.S. banks.
“Given their commitment, and the fact that the transitional date is a publically announced one, it is especially important that member jurisdictions that are home to global systemically important banks make every effort to issue final regulations as soon as possible in order to meet the transition period deadline,” the committee wrote in its report.
When it comes to Basel II, which was due to begin implementation at the end of 2006, only five countries have not yet implemented those rules, including the United States and China, which are home to G-SIBs, according to the report.
“Both countries are in the process of assessing their banks' progress toward meeting all of the qualifying criteria for the advanced approaches,” according to the committee's report.
Basel 2.5, meanwhile, which was due to be implemented by the end of 2011, has been adopted by 20 of the 27 member countries. The United States, China and Saudi Arabia have all issued final regulations, which will come into effect on Jan. 1.
The committee stressed to global leaders how vital it is for all countries to adopt the rules in a timely and consistent manner.
“Given the importance of making the banking system more resilient, it is essential that the Basel framework is implemented consistently and according to the globally-agreed timelines,” the committee said in its report.
The committee also urged G20 finance ministers and central bank governors to ensure that all countries meet deadlines; close any gaps in their regulations identified in countries like the United States and European Union; and encourage nations to implement Basel III in a timely and consistently manner.
Under its review process, the committee has also found certain areas where proposed regulations by individual countries have differed from the agreed framework.
In the European Union and the United States, where rules have been proposed, but not yet finalized, the Basel Committee found a few areas in the draft regulations.
For example, the U.S. proposal differed in its treatment of securitization, while in the EU it pertained to the definition of capital and the bloc’s internal ratings-based approach. All other areas were found to be either “compliant” or “largely compliant.” For its part, Japan, which has adopted a final Basel rule, was largely “compliant.”
Separately, the committee said it is still working on a detailed analysis of the variations of risk-weighted assets across banks, countries and over time for both assets in the banking book and trading book.
