Basel Committee reports to G20 Leaders on Basel III implementation

Press release  | 
03 November 2020
  • Basel Committee observes that further progress has been made in implementing Basel III standards.
  • However, some standards have not yet come into force in some jurisdictions.
  • Provides an update on Basel Framework related measures taken by members in response to Covid-19.

The Basel Committee on Banking Supervision has today published a report for the G20 Leaders at their Summit in Riyadh on 21-22 November. The report is an update on the implementation of Basel III regulatory reforms and the Basel Framework-related measures taken by Basel Committee members in response to Covid-19.

The Committee observes that further progress has been made since last year towards the implementation of Basel III standards in a full, timely and consistent manner. Most member jurisdictions have final rules in place for Basel III standards, including those relating to the Net Stable Funding Ratio (NSFR), the leverage ratio, the standardised approach for measuring counterparty credit risk (SA-CCR) and the supervisory framework for measuring and controlling large exposures (LEX). However, final rules for some standards have not yet come into force in some jurisdictions.

The Committee further notes that most Basel Framework-related measures taken by its members in response to Covid-19 have been capital or liquidity-related, with the primary objective to support banks' ability to continue lending and providing liquidity to the real economy. Most measures make use of the flexibility embedded in the Basel Framework, while most other measures taken over and above this flexibility are temporary in nature.

The Committee reiterates its expectation of full, timely and consistent implementation of all Basel III standards based on the revised timeline endorsed by the Basel Committee's oversight body, the Group of Governors and Heads of Supervision (GHOS), in March 2020.

The Committee will continue to monitor the implementation and evaluate the impact of its standards and regularly report to the G20 on progress. It will also continue to monitor the regulatory and supervisory measures taken by its members in response to Covid-19, including the use of flexibility and consistency of these measures with the Basel Framework.

Notes to editors

The Basel Committee is the primary global standard setter for the prudential regulation of banks and provides a forum for cooperation on banking supervisory matters. Its mandate is to strengthen the regulation, supervision and practices of banks worldwide with the purpose of enhancing financial stability. The Committee reports to the Group of Central Bank Governors and Heads of Supervision and seeks its endorsement for major decisions. The Committee does not possess any formal supranational authority, and its decisions do not have legal force. Rather, the Committee relies on its members' commitments to achieve its mandate. The Basel Committee is chaired by Pablo Hernández de Cos, Governor of the Bank of Spain. More information about the Basel Committee is available here.