Level 2 assessments
The objective of the Level 2 assessments is to ensure compliance of Basel Committee members' domestic regulations with the international minimum requirements agreed by the Basel Committee. This process will promote full and consistent implementation of Basel III by (i) identifying domestic regulations and provisions that are not consistent with the rules agreed by the Committee and (ii) assessing their impact on financial stability and on the international level playing field. The Committee's Level 2 assessments will also facilitate an effective dialogue among Committee members on implementation issues and challenges and provide peer pressure if needed.
The Level 2 assessment methodology includes the following key elements:
-
The Level 2 assessment is factual in nature and focuses on reviewing the completeness (ie all required Basel III provisions have been adopted) and consistency (ie differences in substance) of domestic regulations (ie binding documents that effectively implement Basel III independent of their label).
-
When a gap or divergence from the global standard is identified during the assessment process, key factors that are considered are materiality and impact.
-
Specificities and drivers of local implementation are not taken into account when assessing compliance with the global standard: local specificities are not seen as mitigants for exceeding the scope of national discretion specified within the Basel framework.
-
Domestic measures that go beyond Basel's minimum requirements are not considered to compensate for inconsistencies or gaps identified elsewhere, unless they fully and directly address the identified deficiencies.
-
The Level 2 assessment is limited to regulatory issues and does not consider supervisory or bank practices. The extent to which the Basel framework is effectively enforced by supervisors or whether the local rules deliver comparable, intended results is assessed as part of the Level 3 process.
All Basel Committee member jurisdictions will be assessed over time, but priority has been given to home jurisdictions of global systemically important banks (G-SIBs).
The following Level 2 assessments have been completed:
