International regulatory framework for banks (Basel III)

Highlights:

 

"Basel III" is a comprehensive set of reform measures, developed by the Basel Committee on Banking Supervision, to strengthen the regulation, supervision and risk management of the banking sector. These measures aim to:

  • improve the banking sector's ability to absorb shocks arising from financial and economic stress, whatever the source
  • improve risk management and governance
  • strengthen banks' transparency and disclosures.

The reforms target:

  • bank-level, or microprudential, regulation, which will help raise the resilience of individual banking institutions to periods of stress.
  • macroprudential, system wide risks that can build up across the banking sector as well as the procyclical amplification of these risks over time.

These two approaches to supervision are complementary as greater resilience at the individual bank level reduces the risk of system wide shocks. 

Basel III phase-in arrangements:
Basel III overview table:

 Basel III is part of the Committee's continuous effort to enhance the banking regulatory framework. It builds on the International Convergence of Capital Measurement and Capital Standards document (Basel II).

Compilation of documents that form the global regulatory framework for capital and liquidity (Basel II, Basel 2.5 and Basel III)