Basel III implementation and update on cryptoasset standard

01 July 2024
Knowledge Base

The Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of the Basel Committee on Banking Supervision, met recently. The GHOS took stock of the implementation status of the outstanding Basel III reforms, which were finalised in 2017. Members have continued to make good progress with implementation. Around two thirds of member jurisdictions will have implemented all, or the majority, of the standards by this year, with the remaining jurisdictions planning on doing so by next year.

GHOS members unanimously reaffirmed their expectation of implementing all aspects of the Basel III framework in full, consistently and as soon as possible. The series of shocks to financial markets over the past few years have once again highlighted the importance of having a prudent global regulatory framework in place. The GHOS tasked the Committee with continuing to monitor and assess the full and consistent implementation of Basel III.

Cryptoasset standard

The GHOS also agreed to defer implementation of the Committee’s prudential standard for banks’ cryptoasset exposures by one year to 1 January 2026. The standard, which was endorsed by the GHOS in December 2022, provides a robust and prudent global regulatory framework for internationally active banks’ exposures to cryptoassets which preserves financial stability while promoting responsible innovation.

As part of its ongoing monitoring of cryptoasset market developments, the Committee consulted on a set of targeted revisions to the standard in December 2023. It will discuss whether to make any revisions to the standard later this year. The revised implementation date will help to ensure that all members are able to implement the standard in a full, timely and consistent manner.

The Basel Committee: The Basel Committee is the primary global standard setter for the prudential regulation of banks and provides a forum for cooperation on banking supervisory matters. Its mandate is to strengthen the regulation, supervision and practices of banks worldwide with the purpose of enhancing financial stability. The Committee reports to the Group of Central Bank Governors and Heads of Supervision and seeks its endorsement for major decisions. The Committee has no formal supranational authority, and its decisions have no legal force. Rather, the Committee relies on its members’ commitments to achieve its mandate. The Group of Central Bank Governors and Heads of Supervision is chaired by Tiff Macklem, Governor of the Bank of Canada. The Basel Committee is chaired by Pablo Hernández de Cos, Governor of the Bank of Spain.

Leave a Reply

Your email address will not be published. Required fields are marked *