Basel III gets one-year deferral 27 March 2020Basel Reporter: Maddie Saghir
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The implementation of Basel III has been deferred from 1 January 2022 to 1 January 2023, in response to the challenges associated with the COVID-19 pandemic on the global banking system.
The decision, made by the Basel Committee鈥檚 oversight body, the Group of Central Bank Governors and Heads of Supervision (GHOS), has endorsed a set of measures 鈥渢o provide additional operational capacity for banks and supervisors鈥� to respond to the immediate financial stability priorities.
Additionally, the date of the accompanying transitional arrangements for the output floor has been extended by one year to 1 January 2028.
Basel III is an international regulatory framework that introduced a set of reforms designed to improve the regulation, supervision and risk management within the banking sector.
Fran莽ois Villeroy de Galhau, chair of the GHOS and governor of the Bank of France, says: "It is important that banks and supervisors are able to commit their full resources to respond to the impact of COVID-19.
鈥淭his includes providing critical services to the real economy and ensuring that the banking system remains financially and operationally resilient. The measures endorsed by GHOS today aim to prioritise these objectives and we remain ready to act further if necessary."
Pablo Hern谩ndez de Cos, chair of the Basel Committee and governor of the Bank of Spain, adds: 鈥淭he 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.鈥�
Basel III is the latest regulatory framework to see its implementation timeline scuppered by the COVID-19 pandemic.
The first phase of the Securities Financing Transactions Regulation has been pushed back from April to July and the next phase of the Uncleared Margin Rules is also expected to be delayed.
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