BoE targets 1 January 2025 for delivery of remaining Basel III elements
21 March 2022 UK
Image: AdobeStock/William
The Bank of England (BoE) has indicated that it will be releasing a consultation paper in Q4 2022 outlining its steps to implement remaining elements of the Basel III standard.
The UK central bank released two policy statements during 2021, specifically PS17/21 and PS22/21, commenting on outstanding components of the Basel III standards that are still to be adopted in the UK.
Since issuing these statements, the Bank has continued to work on proposals to implement these remaining elements, referred to collectively as Basel 3.1.
“Basel 3.1 is the final package of banking prudential reforms developed in response to the 2008-9 financial crisis,” it explains. “It is an important and comprehensive package of measures that will make significant changes to the way firms calculate risk-weighted assets.”
To support firms with their development planning, the BoE says that it is “today providing additional clarity on our intended timetable”. It expects to publish a consultation paper on Basel 3.1 implementation in Q4 2022.
The timing of this work has been uncertain, the Bank concedes, owing to the internationally agreed delay as part of the response to COVID-19, the necessity to respond to other priorities and new processes that the Prudential Regulatory Authority has needed to develop to convert Basel standards into detailed rule-making proposals under a UK legal framework.
“Taking into account publicly-announcement implementation timetables in other major jurisdictions and the need to provide firms with sufficient time to implement the final policies, our current intention is to consult on a proposal that these changes will become effective on 1 January 2025,” it concludes.
The UK central bank released two policy statements during 2021, specifically PS17/21 and PS22/21, commenting on outstanding components of the Basel III standards that are still to be adopted in the UK.
Since issuing these statements, the Bank has continued to work on proposals to implement these remaining elements, referred to collectively as Basel 3.1.
“Basel 3.1 is the final package of banking prudential reforms developed in response to the 2008-9 financial crisis,” it explains. “It is an important and comprehensive package of measures that will make significant changes to the way firms calculate risk-weighted assets.”
To support firms with their development planning, the BoE says that it is “today providing additional clarity on our intended timetable”. It expects to publish a consultation paper on Basel 3.1 implementation in Q4 2022.
The timing of this work has been uncertain, the Bank concedes, owing to the internationally agreed delay as part of the response to COVID-19, the necessity to respond to other priorities and new processes that the Prudential Regulatory Authority has needed to develop to convert Basel standards into detailed rule-making proposals under a UK legal framework.
“Taking into account publicly-announcement implementation timetables in other major jurisdictions and the need to provide firms with sufficient time to implement the final policies, our current intention is to consult on a proposal that these changes will become effective on 1 January 2025,” it concludes.
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