Governors and Heads of Supervision announce deferral of Basel III implementation to increase operational capacity of banks and supervisors to respond to Covid-19
27 March 2020
"It is important that banks and supervisors are able to commit their full resources to respond to the impact of Covid-19. This includes providing critical services to the real economy and ensuring that the banking system remains financially and operationally resilient. The measures endorsed by GHOS today aim to prioritise these objectives and we remain ready to act further if necessary," said François Villeroy de Galhau, Chairman of the GHOS and Governor of the Bank of France.
Pablo Hernández de Cos, Chairman of the Basel Committee and Governor of the Bank of Spain, said: "Today's measures will free up operational capacity for banks and supervisors as they respond to the economic impact of Covid-19. The Committee will continue to closely monitor the impact of Covid-19 on banks and supervisors and respond as necessary in coordination with the Financial Stability Board and other standard-setting bodies on cross-cutting issues."
The measures endorsed by the GHOS comprise the following changes to the implementation timeline of the outstanding Basel III standards:
These standards were finalised with the objective of complementing the initial set of Basel III standards. The revised timeline is therefore 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.
GHOS members unanimously reaffirmed their expectation of full, timely and consistent implementation of all Basel III standards based on this revised timeline. Current events demonstrate once again the importance of a resilient financial system, which these reforms will help further reinforce.