Basel III implementation assessment of the Kingdom of Saudi Arabia published by Basel Committee

30 September 2015

Press release

The Basel Committee on Banking Supervision has today published two reports assessing the Kingdom of Saudi Arabia's implementation of the Basel risk-based capital framework and the Liquidity Coverage Ratio (LCR). These form part of a series of reports on Basel Committee members' implementation of Basel standards under the Committee's Regulatory Consistency Assessment Programme (RCAP).

A key aim of the RCAP is to assess the consistency and completeness of a jurisdiction's adopted standards and the significance of any deviations from the regulatory framework. The RCAP does not take account of a jurisdiction's bank supervision practices nor does it evaluate the adequacy of regulatory capital and high-quality liquid assets for individual banks or a banking system as a whole.

The assessment outcomes for the Kingdom of Saudi Arabia are highly positive and reflect various amendments to the risk-based capital and LCR rules undertaken by the authorities during the assessment. The Basel Committee noted that several aspects of the domestic rules in the Kingdom of Saudi Arabia are more rigorous than required under the Basel framework.

Overall, the domestic implementation of the risk-based capital framework is found to be "compliant" with the Basel standards as all 14 components are assessed as "compliant". Regarding the LCR, the Kingdom of Saudi Arabia is assessed overall as "largely compliant", indicating that most but not all provisions of the Basel standards were met. The implementation of the LCR regulation is assessed as "largely compliant" and the implementation of the LCR disclosure standards is assessed as "compliant".

In carrying out the reviews of the Kingdom of Saudi Arabia, the assessment teams held discussions with senior officials and technical staff of the Saudi Arabian Monetary Agency. The teams also met with a select group of Saudi Arabian banks.

Notes to editors

The Basel Committee on Banking Supervision consists of senior representatives of bank supervisory authorities and central banks. Member countries include Argentina, Australia, Belgium, Brazil, Canada, China, France, Germany, Hong Kong SAR, India, Indonesia, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, Russia, Saudi Arabia, Singapore, Spain, South Africa, Sweden, Switzerland, Turkey, the United Kingdom and the United States.

The RCAP is a central element of the Basel Committee's continuing efforts to promote timely adoption of its standards and to monitor its members' full and consistent compliance with the Basel framework. The RCAP also helps member jurisdictions identify deviations from the Basel framework, weigh the materiality of any deviations and undertake necessary reforms. Based on the findings of these assessments, many assessed jurisdictions have already amended their regulations to align them more closely with the Basel framework, thereby helping to promote global financial stability and a level playing field for internationally active banks.

The Basel Committee has previously published jurisdictional assessments of Australia, Brazil, Canada, China, the European Union, Hong Kong SAR, India, Japan, Mexico, Singapore, South Africa, Switzerland and the United States.