Basel III
WHAT IS THIS? Basel III is a set of bank soundness rules drawn up by the Basel Committee on Banking Supervision in response to the financial crisis. It hikes the minimum amount of capital banks must hold, introduces new leverage and liquidity ratios, and limits the use of internal models.
Europe’s banks can’t agree on how to fix the output floor
Some want market risk excluded, while others push for greater savings from credit modelling
Banque de France’s Denis Beau on supervisory reform
Deputy governor speaks about suppression of systemic risk buffer, TLAC floor proposals, and simplifying regulation and resolution
Banks welcome UK IMA eligibility test delay, but some want more
Risk Live: PRA extends monitoring for ‘Spearman’ test, while US regulators drop correlation metric
US regulators cut FRTB’s IMA capital hit by 59%, Isda finds
Trade body pushes for further changes to cross-product netting, default risk charge
US FRTB glitch could spit out negative capital charges
Effort to recognise risk diversification between IMA and standardised approach went too far
Don’t mind the gap risk: regulatory treatment of credit repacks
Gap risk in repackaging is not a credit valuation adjustment for Basel III capital purposes, argues senior quant Andrey Chirikhin
Double, but no trouble? CVA capital hit may lack clout
Industry opinion mixed around Basel III endgame derivatives charge
Erba myth: will US banks choose new capital measure?
B3E gives US banks a dilemma – adopt expanded risk-based approach, or a new standardised alternative
Fed to move tailored-capital goalposts soon, says Bowman
Banks hope agencies will index triggers for harsher capital rules to economic growth
G-Sib capital surcharge: how indexing and averaging alter incentives
Capital risk strategist anticipates Basel III endgame impact on US big-bank behaviour
Un-American or un-JPM? Surcharge rethink divides G-Sibs
Some see sense in rethink to funding indicator, others call for a backtrack
Europe’s next chore: cleaning a floor made messy by the US
Rejection of Basel III’s output floor leaves EU with some difficult decisions to make
G-Sibs face daily data headache from US surcharge proposal
Move to more frequent measurement would be “massively burdensome”, says senior exec
Surcharge of the light-touch brigade
US reform of G-Sib surcharge goes well beyond simple update
EU weighs response to US dropping Basel capital floors
European regulators assessing whether US proposal amounts to a “substantial” deviation
European Commission plans permanent changes to FRTB
EU legislator will start work on new rules later this year to ensure level playing field with US
Banks fear US cross-product capital relief will fall short
Proposal to treat repo as futures for SA-CCR may not do enough to support UST clearing mandate
Basel III endgame: overall relief hides winners and losers
G-Sibs gain from surcharge reform while AOCI hits regional banks
AOCI deterioration resumes at US banks in Q1
JP Morgan records largest quarterly rise in unrealised losses
US banks made no headway on EVE transparency in 2025
Morgan Stanley remains lone US G-Sib not disclosing key measure of long-term interest rate sensitivity
One thing missing from US Basel III proposal: a deadline
Without a deadline, risk teams will struggle to secure resources to begin implementation projects