Brazil's implementation of Basel III - report published by the Basel Committee
10 December 2013
The Basel Committee on Banking Supervision has today published a report on the regulations that implement the Basel capital framework in Brazil.
The compliance of Brazil's domestic capital rules with the international Basel capital standards was assessed as part of the Committee's Regulatory Consistency Assessment Programme (RCAP). The assessment team held discussions with senior officials and technical staff of the Central Bank of Brazil, selected large Brazilian banks, one accounting/audit firm and a rating agency.
Brazil's implementation of the Basel capital framework was found to be closely aligned with the Basel III global standards: 11 out of 14 assessed components were found to be "Compliant". The three components that were graded "Largely Compliant" were the Standardised Approach for credit risk, minimum requirements for capital buffers and Pillar 2 (the Supervisory Review Process). Although some differences with the Basel framework were found in these areas, none of the findings were judged to be material at this point. Therefore, the overall framework of Brazil's capital regulation was graded "Compliant".
During the assessment, new regulatory documents were issued to rectify a number of provisions that were initially identified as deviations from the Basel framework. These additional regulatory documents improved considerably the level of compliance with the Basel standards, and demonstrate Brazil's strong commitment to implement the global regulatory reforms.
The report published today reflects the Committee's continuing efforts to promote adoption of its standards and to monitor its members' full and consistent compliance with the Basel framework. Through the RCAP, the Committee monitors the timely adoption of regulations by its members, assesses their consistency with the Basel framework and analyses the quality of intended regulatory outcomes. The RCAP also helps member jurisdictions to identify deviations from the Basel framework and assesses the materiality of any deviations.
The Brazil report is the seventh RCAP assessment of Basel III capital standards. Earlier reports on China, the European Union, Japan, Singapore, Switzerland and the United States were published by the Committee and are available on the Basel Committee's website. Assessments of the implementation of the Basel III capital standards in Australia and Canada are currently under way, and follow-up assessments of the final Basel III rules in the European Union and the United States have also commenced.