The Basel Committee on Banking Supervision (BCBS) yesterday published a report updating the progress made on implementing Basel III regulatory reforms. The report is published in time for the G20 summit in Hamburg on 7-8 July.

In its statement, the BCBS said: “Overall, further progress has been made in implementing Basel III standards. The implementation of capital and liquidity standards has generally been timely and consistent, and banks continue to build higher and better capital and liquidity buffers.”

Basel III progress

The report stated that progress has been made in the following areas:

• further progress has been made since last year’s update to the G20 Leaders in implementing the Basel III standards in a full, timely and consistent manner;
• banks continue to build larger and better-quality capital and liquidity buffers while reducing their leverage;
• the Basel III standards for capital, liquidity and global systemically important banks (G-SIBs) have generally been transposed into domestic regulations within the time frame set by the Basel Committee;
• the key components, including the definition of capital, the capital conservation buffer and the Liquidity Coverage Ratio (LCR), are now enforced by all member jurisdictions;
• member jurisdictions continue their efforts to adopt other Basel III standards, including those relating to margin requirements for non-centrally cleared derivatives, the Net Stable Funding Ratio (NSFR), the leverage ratio and revised Pillar 3 disclosure requirements.

Some delays

But the report notes that some aspects of Basel III are delayed, including:

• domestic rules on the standardised approach for measuring counterparty credit risk (SA-CCR);
• capital requirements for exposures to central counterparties (CCPs); and
• capital requirements for equity investments in funds.

There has recently been pressure on the Basel Committee to negotiate further reforms to banking rules, particularly with regards to a standardised bank risk assessment model. European banks currently use their own risk assessment criteria. Pressure has come from the US to conclude these negotiations before the G20 meeting but some EU officials held the view that agreement on new rules would be 'unlikely' by that time (as reported by Euractiv).