Basel III – Implementation
Full, timely and consistent implementation of Basel III is fundamental to a sound and properly functioning banking system that is able to support economic recovery and growth on a sustainable basis. Consistent implementation of Basel standards will also foster a level playing field for internationally active banks. In November 2011, G20 Leaders at the Cannes Summit called on jurisdictions to meet their commitment to adopt and implement fully and consistently Basel II and Basel 2.5 by end-2011, and Basel III starting in 2013 and with full implementation by 1 January 2019.
The FSB has designated Basel III as one of the priority areas for implementation monitoring. The task of regular monitoring and reporting in this area is carried out by the Basel Committee on Banking Supervision (BCBS). To monitor progress and assess the implementation of Basel III and its outcomes, the BCBS established the Regulatory Consistency Assessment Programme (RCAP) in 2012. The RCAP consists of two elements: (i) monitoring of the timely adoption of new Basel standards by member jurisdictions and of banks’ progress in raising capital and liquidity buffers to meet the new minimum requirements; and (ii) consistency assessments and analytical studies of prudential outcomes. These cover how domestic capital, liquidity, leverage and systemically important bank (SIB) regulations have incorporated the internationally agreed Basel III minimum standards, and analytical reviews of banks’ calculations of capital ratios, risk-weighted assets (RWAs), and other prudential outcomes. The RCAP is also helping to highlight how effective functioning of the Basel prudential standards depends on complementary and effective supervisory and industry practices.
The FSB published its third annual report to the G20 on the implementation and effects of the G20 financial regulatory reforms in July 2017. Below is an extract from this report on the status of implementation of Basel III.