Transitional arrangements
This chapter describes transitional arrangements for the output floor.
- Effective as of: 01 Jan 2023
- Last update: 27 Mar 2020
- Status Current
90.1
The output floor will be implemented as of 1 January 2023, based on the following calibration phase-in arrangement:
|
Phase-in arrangements for output floor |
Table 1 |
|
|
Date |
Calibration |
|
|
1 January 2023 |
50% |
|
|
1 January 2024 |
55% |
|
|
1 January 2025 |
60% |
|
|
1 January 2026 |
65% |
|
|
1 January 2027 |
70% |
|
|
1 January 2028 |
72.5% |
|
90.2
During the phase-in period, supervisors may exercise national discretion to cap the incremental increase in a bank’s total risk-weighted assets (RWA) that results from the application of the floor. This transitional cap will be set at 25% of a bank’s RWA before the application of the floor. In the example shown in RBC20.13, the application of this national discretion by the supervisor would cap the bank’s RWA to 95 (ie a 25% increase of its pre-floor RWA of 76).
This standard describes the scope of application of the Basel Framework.
This standard describes the criteria that bank capital instruments must meet to be eligible to satisfy the Basel capital requirements, as well as necessary regulatory adjustments and transitional arrangements.
This standard describes the framework for risk-based capital requirements.
This standard describes how to calculate capital requirements for credit risk.
This standard describes how to calculate capital requirements for market risk and credit valuation adjustment risk.
This standard describes how to calculate capital requirements for operational risk.
This standard describes the simple, transparent, non-risk-based leverage ratio. This measure intends to restrict the build-up of leverage in the banking sector and reinforce the risk-based requirements with a simple, non-risk-based "backstop" measure.
This standard describes the Liquidity Coverage Ratio, a measure which promotes the short-term resilience of a bank's liquidity risk profile.
The net stable funding ratio requires banks to maintain a stable funding profile in relation to the composition of their assets and off-balance-sheet activities.
Large exposures regulation limits the maximum loss that a bank could face in the event of a sudden counterparty failure to a level that does not endanger the bank's solvency. This standard requires banks to measure their exposures to a single counterparty or a group of connected counterparties and limit the size of large exposures in relation to their capital.
This standard establishes minimum standards for margin requirements for non-centrally cleared derivatives. Such requirements reduce systemic risk with respect to non-standardised derivatives by reducing contagion and spillover risks and promoting central clearing.
The Pillar 2 supervisory review process ensures that banks have adequate capital and liquidity to support all the risks in their business, especially with respect to risks not fully captured by the Pillar 1 process, and encourages good risk management.
This standard sets out disclosure requirements, which aim to encourage market discipline.
The Basel Core Principles provide a comprehensive standard for establishing a sound foundation for the regulation, supervision, governance and risk management of the banking sector.
