Basel III sees one-year deferral in response to COVID-19 pandemic
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Basel III sees one-year deferral in response to COVID-19 pandemic 27 March 2020Basel Reporter: Maddie Saghir
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The implementation of Basel III has been deferred from 1 January 2022 to 1 January 2023, in response to the challenges associated with the COVID-19 pandemic on the global banking system.
The decision, made by the Basel Committee’s oversight body, the Group of Central Bank Governors and Heads of Supervision (GHOS), has endorsed a set of measures “to provide additional operational capacity for banks and supervisors” to respond to the immediate financial stability priorities.
Additionally, the date of the accompanying transitional arrangements for the output floor has been extended by one year to 1 January 2028.
Basel III is an international regulatory framework that introduced a set of reforms designed to improve the regulation, supervision and risk management within the banking sector.
François Villeroy de Galhau, chair of the GHOS and governor of the Bank of France, said: "It is important that banks and supervisors are able to commit their full resources to respond to the impact of COVID-19.”
He continued: “This includes providing critical services to the real economy and ensuring that the banking system remains financially and operationally resilient. The measures endorsed by GHOS today aim to prioritise these objectives and we remain ready to act further if necessary."
Pablo Hernández de Cos, chair of the Basel Committee and governor of the Bank of Spain, commented: “The committee will continue to closely monitor the impact of COVID-19 on banks and supervisors and respond as necessary in coordination with the Financial Stability Board and other standard-setting bodies on cross-cutting issues.”
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