Basel III into force

[Dingo]

Hello @David Harper CFA FRM,

I'm very confused with the dates when Basel III will come into force in the European Union.

As far as I know, Basel Committee for Banking Supervision finished started Basel III document in 2010 and finished it in 2017. I know that they are not legally binding for EU or any others states unless their respective parliaments say so. For the EU, Capital Requirements Regulation was enacted in 2013 and applies from 2014, for most part of the Basel III documents (https://en.wikipedia.org/wiki/Capital_Requirements_Regulation_2013).
However, today I stumbled upon this artice: https://www.ft.com/content/0122b5c4-1cd2-4c17-aaee-590f10205543, which says:
'The new rules are due to come into force between 2023 and 2028, delayed by a year because of the pandemic. '

This confuses me. If Basel III is already into practice from 2014, how is it now that period from 2023 to 2028 is mentioned?


Thank you!

 

[David Harper CFA FRM]

HI @Dingo The regs were finalized by the Committee in December 2017, but implementation requirements were subsequent (there was always a "phase-in" that originally was 2019 but Basel III is an over-large clunky complex thing that kept morphing and delaying in pieces like a clumsy snail).

I assume you realize that country supervisors vary their own rules from the voluntary Basel regs, including the EU (like the US) has its own add-ons etc. Please note that Basel 3.X (i.e., > 3.0) has different labels. Some authors refer to FRTB as Basel IV because FRTB started/finalized later in 2019, see https://www.bis.org/bcbs/publ/d457.htm, but FRTB is included in the 2023 implementation set found at the ultimate source: https://www.bis.org/bcbs/basel3.htm. As far as I can tell, BIV is a blurry label.

But in summary:

• Basel III was finalized on Dec 7, 2017. See https://www.bis.org/bcbs/publ/d424.htm. On page 2, notice the Implementation date (aside from Output floor) is January 1st 2022
• On March 27, 2020, the Committee pushed back the implementation by one year to January 1st 2023 due to the pandemic. See https://www.bis.org/press/p200327.htm
• Specific status varies by country and monitoring reports can be found here at https://www.bis.org/bcbs/implementation/rcap_reports.htm

 

[Dingo]

Thank you, David!