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.
Fed’s new leverage ratio: the horse that never left the gate
Most of the biggest dealers aren’t leverage constrained now, and experts are sceptical that banks will use the extra capacity for Treasuries
Full output floor would cut average CET1 ratio by 70bp
Phased-in Basel III rules would add over €500bn to RWAs at 64 European banks in downturn
Speedy onboarding: the push for faster model approvals
Europe’s banking watchdog is planning to streamline how it authorises credit model updates. Not a moment too soon, say bankers
EU banks face €500bn RWAs surge from full output floor
Risk charges to rise 8% on average under fully phased-in rules by 2033
Basel III overhaul doubles Nomura’s credit risk
Surge reflects asset migration and new equity treatment
Deutsche Bank projects €118bn RWA hit from output floor
Mitigation efforts expected to reduce charges significantly, bank says
Will the UK’s FRTB time warp turn into a horror show?
UK regulator’s proposed transition year in 2027 could double banks’ implementation work
European Commission already preparing next FRTB move
As EC runs out powers to delay rules again, proposal for temporary capital relief is on the agenda
Danske shrinks CVA capital charges 44% after hedge revamp
Credit protection buying spree helps cut capital requirements to lowest level since 2014
Bank of England floats ‘quasi-IMA’ in FRTB standardised method
Dealers welcome new route to capitalising residual risk, but it could fragment global ruleset
Banks seek EU supervisory green light on external credit data
GCD-developed industry standard to show pooled loss data is representative of banks’ portfolios
Japan FSA’s Ariizumi on Basel delays and regulating AI
Outgoing international affairs chief issues rallying call for Basel III adoption, saying Japan has “kept its promise”
CVA risk charges spike 73% at EU banks under Basel III
Crédit Agricole leads surge, as basic approach dominates CVA capital calculations
Former OCC chief on the sting of peeling the Basel III ‘onion’
Michael Hsu warns successors not to cut bank capital or neglect rate risks that destroyed SVB
Basel III overhaul triggers credit RWA reshuffle at EU banks
A-IRB down by a third, F-IRB more than doubles and standardised approach up by a quarter
UniCredit’s market RWAs would inflate 75% under FRTB
Pro forma figures for capital floor give first look at de-modelling impact on a major EU dealer
Do bank complexities increase the risks? Insights from four Asian countries
Focussing on China, Malaysia, Pakistan and Qatar, the authors investigate how bank complexity impacts bank risk.
Japan regulator calls on laggards to keep Basel promise
After EU and UK delays – and amid fears of US divergence – Japan is keeping a close eye on its peers, says Shigeru Ariizumi
The VAR-centric models that never were
Often spotlighted, rarely dominant – VAR plays a surprisingly small role in most IMA stacks
European supervisors showing ‘no mercy’ on SA-CVA approvals
Risk Live: Bank of America found the compliance workload similar to FRTB internal models
Bucking Japan megabank trend, Norinchukin’s market RWAs spike 41%
Latest surge underscores challenge of adapting to FRTB
BoE official plays down fears of global regulatory fragmentation
Risk Live: UK expects close co-operation with US, while others express concern over Basel III endgame
US Basel III delay to 2026 seen as almost inevitable
Reprioritisation and leadership changes cast doubts on timing of new proposals
CRR III curbs charges for BPCE’s equity stakes
RWAs for subsidiaries outside prudential consolidation drop 82% after Basel revamp