Banking regulators have published their latest progress report on the implementation of a new capital adequacy regime for global banks.
The Basel Committee on Banking Supervision published its second progress report on Basel III implementation on Tuesday, which tracks the implementation of Basel II, Basel 2.5 and Basel III rules by various countries. It outlines the progress of individual countries in adopting the Basel committee’s regulatory standards into national law or regulation.
According to the report, Canada has fully implemented Basel II and 2.5, and it has published draft regulations for the implementation of Basel III reforms. No country has finalized their rules for Basel III yet, and only Japan and Saudi Arabia are more advanced than Canada in the process, the report shows.
“Full, timely and consistent implementation of the new capital standards by internationally active banks is a top priority for the Basel Committee. This will help to restore confidence in regulatory capital ratios and to improve the resilience of the global banking system,” said Stefan Ingves, chairman of the Basel Committee and governor of Sveriges Riksbank. “Committee members are encouraged to keep up their efforts to ensure that implementation of the Basel III rules can begin, as agreed, from January 1, 2013.”
The Basel Committee said that it has also commenced a program of peer reviews to assess whether its members’ national rules and regulations are consistent with the globally agreed minimum standards. It said these reviews will identify differences that could raise prudential or level playing field concerns.
The methodology used to conduct these consistency reviews was also published on Tuesday, and, it noted that reviews of the Basel rules adopted by the European Union, Japan and the U.S. are already underway.
The final component of the committee’s implementation program entails a review of the results delivered by national rules to determine whether the outcomes are consistent across banks and jurisdictions. These reviews started at the beginning of 2012, and initial findings are expected to be presented to the committee before the end of the year. The initial focus of that review is on the calculation of risk-weighted assets in both the banking book and the trading book.