Implementation of capital standards: assessment reports published by Basel Committee

1 October 2012

The Basel Committee on Banking Supervision has today published three reports assessing the rules that will implement Basel III in the European Union, Japan and the United States.

Conducted by independent teams of technical experts from a wide range of countries, the assessments compared the relevant domestic regulations with the Basel Committee's global standards. The assessment teams comprehensively reviewed the capital requirements set out in the Basel II, Basel 2.5 and Basel III accords. In the case of the European Union and the United States, the teams assessed draft regulations, which will be the subject of follow-up reviews once they are finalised.

Commenting on the assessments, Stefan Ingves, Chairman of the Basel Committee and Governor of Sveriges Riksbank, Sweden's central bank, said "The three reports published today demonstrate the Committee's commitment to monitoring its members' compliance with the globally agreed minimum standards." He added that "It is pleasing that Japan's transposition of the Basel III standards into final rules has been judged as compliant. In the case of the European Union and the United States, the gradings were based on draft regulations, meaning that there is now a window of opportunity for the gaps identified to be closed."

The Basel III implementation review comprises the following three levels:

  • Level 1: ensuring the timely adoption of Basel III
  • Level 2: regulatory consistency with Basel III
  • Level 3: consistency of outcomes (initially focusing on risk-weighted assets)

The Level 1 assessment outcomes for the three jurisdictions are indicated in the reports as well. The Committee intends to publish an updated Level 1 report covering all Committee members in early October. The Level 2 assessment process is described in detail on the Committee's website.