Assessing consistency of implementation of Basel standards
Updated 9 December 2016
The Basel Committee's jurisdictional assessments review the extent to which domestic Basel regulations in each member jurisdiction are aligned with the minimum regulatory standards agreed on by the Committee.
The assessments examine the consistency and completeness of a jurisdiction's adopted standards including the prudential significance of any deviations in the regulatory framework. To ensure that the internationally active segment of the domestic banking system is in line with the letter and spirit of the relevant Basel standards, the assessments highlight the current and potential impact of deviations on the overall regulatory environment. This provides transparency to member jurisdictions of cross-jurisdictional differences and allows jurisdictions to initiate corrective measures, as appropriate, to strengthen their regulatory regimes and improve their functioning.
The RCAP assessments of capital regulations cover the full scope of Basel standards, ie Basel II, 2.5 and III.
Presently, the assessment methodology is based on the following broad elements:
- A review of completeness (ie all relevant Basel provisions have been adopted within the context of each member jurisdiction).
- A detailed examination of consistency (ie differences in substance) of domestic regulations (ie binding documents that effectively implement the intent of relevant Basel standards).
- Significance of an identified gap or divergence from the Basel standard based on its current and potential prudential impact.
- Local specificities are not viewed as mitigants for exceeding the scope of national discretion specified within the Basel framework.
- Domestic measures that go beyond Basel's minimum requirements do not compensate for inconsistencies or deviations identified elsewhere.
- The scope is limited to regulatory issues and does not consider risks to overall financial system stability or bank practices, or systemic spill overs.
- The comparability of results delivered by local rules is assessed as part of specific thematic assessments.
- The supervisory effectiveness of enforcing a regulatory regime is left for other assessment programs such as the assessments of Basel Core Principles conducted under the World Bank-IMF Financial Sector Assessment Program (FSAP), or those carried out by the Committee as part of its other "peer reviews" on supervision issues, or the broader reviews conducted by the FSB.
The published jurisdiction level assessments are available below, together with post RCAP follow-up actions:1
1 The actions are based on self-reporting from each jurisdiction and have not been subject to assessment by the Basel Committee.