On August 29, 2016, the Basel Committee published a report to the G20 leaders, providing an update on implementation of the Basel III regulatory reforms since the Basel Committee’s last progress report in November 2015. The Basel Committee concluded that the Basel III capital and liquidity standards have generally been transposed into domestic regulations within the time frame set by the Committee. Since the last report, key components such as the risk-based capital standards and the LCR have now been enforced by all member jurisdictions, while the G-SIB framework has been enforced by all member jurisdictions that are home jurisdictions to G-SIBs. The Basel Committee highlighted the ongoing efforts of member jurisdictions to adopt other Basel III standards such as the leverage ratio and the NSFR.
However, some jurisdictions have noted challenges in meeting the implementation deadlines for standards such as the margin requirements for non-centrally cleared derivatives (September 2016) and the revised Pillar 3 framework (the end of 2016). The Basel Committee noted that the implications of the Basel III standards are that banks have continued to build capital and liquidity buffers since last year’s report. The Basel Committee concluded that despite progress being made, challenges still remain with regard to the timely regulatory adoption of Basel standards in some jurisdictions, and that this is important due to the cross-border nature of banking activities.
The report is available at: http://www.bis.org/bcbs/publ/d377.pdf.