PRA delays Basel 3.1 implementation by one year
17 January 2025 UK
Image: thekob5123/stock.adobe.com
The UK Prudential Regulation Authority (PRA), in consultation with the UK Treasury, has delayed the implementation of Basel 3.1 in the UK by one year.
According to the authority, this allows more time for greater clarity to emerge about plans for the standards’ implementation in the US given the current uncertainty.
The institution now expects to implement Basel 3.1 on 1 January 2027, but it said it will continue to monitor developments in the market.
In line with the approach taken for the six-month delay announced in September 2024, the transitional periods in the rules will be reduced to ensure the date of full implementation remains at 1 January 2030, as set out in the original proposals.
Basel 3.1 is the final set of international banking reforms designed to improve banks’ measurement of risk, in response to the 2008 global financial crisis.
By standardising approaches between firms, the standards aim to make banks’ capital ratios more consistent and comparable.
In light of the delay in implementation, the PRA has also paused its previously announced firm data collection exercise until further notice.
According to the authority, this allows more time for greater clarity to emerge about plans for the standards’ implementation in the US given the current uncertainty.
The institution now expects to implement Basel 3.1 on 1 January 2027, but it said it will continue to monitor developments in the market.
In line with the approach taken for the six-month delay announced in September 2024, the transitional periods in the rules will be reduced to ensure the date of full implementation remains at 1 January 2030, as set out in the original proposals.
Basel 3.1 is the final set of international banking reforms designed to improve banks’ measurement of risk, in response to the 2008 global financial crisis.
By standardising approaches between firms, the standards aim to make banks’ capital ratios more consistent and comparable.
In light of the delay in implementation, the PRA has also paused its previously announced firm data collection exercise until further notice.
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