The European Commission has started a public consultation on the way how to implement the final Basel III rules that were published between December 2017 and the beginning of 2019. We commented on the rules published until 2017 also in a separate article – see here.
The consultation document may be found here. The document contains 212 questions in the 9 areas:
1. Credit risk
2. SFTs
3. Operational risk
4. Market risk
5. CVA risk
6. Output floor
7. Centralised supervisory reporting and disclosures
8. Sustainable finance
9. Fit and proper
Basel III rules has been published “per partes” and as a reaction to the financial crisis in 2008. Large parts of the Basel III framework have already been implemented through legislative packages called “CRR/CRD4” and “CRR2/CRD5”.
The Basel III rules published in December 2017 focused on the revisions to the prudential standards for credit, operational and credit valuation adjustment (CVA) risk as well as the replacement of the so-called “Basel I floor” with an aggregate output floor. They were later followed by updated Pillar 3 disclosure requirements published in December 2018. In January 2019 a revised version of the market risk standard known as ‘fundamental review of the trading book’ (FRTB) was published. Moreover, some European specifics are part of the consultation including also the area of convergent and consistent supervisory practices across the Union and alleviating the administrative burden.
The deadline for sending responses is 3rd January 2020.
20-12-2019