Global banking regulators are delaying implementation of reforms that are part of the new Basel III capital regime, citing the disruption created by the Covid-19 outbreak.
The group that oversees the Basel Committee on Banking Supervision, known as the Group of Central Bank Governors and Heads of Supervision (GHOS), agreed to steps designed to “provide additional operational capacity” for banks and their regulators to respond to the pandemic.
Among other things, they agreed to delay the implementation of certain Basel III standards by one year to Jan. 1, 2023, including the revised market risk framework and new disclosure requirements. They also delayed accompanying transitional arrangements by a year to Jan. 1, 2028.
The regulators said the revised timeline is “not expected to dilute the capital strength of the global banking system, but will provide banks and supervisors additional capacity to respond immediately and effectively to the impact of Covid-19.”
The Basel III reforms were developed in the wake of the financial crisis to bolster the resilience of the financial system.