Basel Committee seeks feedback on streamlined version of Basel III

The Basel Committee on Banking Supervision unveiled a streamlined version of the Basel III framework today (April 9), in a bid to round up the myriad provisions published over the course of almost 10 years.

The reorganisation saw the entire accord transferred from a lengthy series of PDFs into a more easily navigable web-based format. The draft version is now available on the Bank for International Settlements’ website.

The earlier publication format made it “difficult for website users to find the standards that are currently in force, or track how the framework has developed over time”, the Basel Committee said.

For those who prefer PDFs, the entirety of Basel III remains available as a single, 1,868-page document, a sign of how far the accord has sprawled over the years. In his widely-cited speech of 2012, The dog and the frisbee, the Bank of England’s Andy Haldane complained at the 616 pages that Basel III then amounted to – around double the length of Basel II, and a far cry from the 30 pages of Basel I.

But the web-based format provides a more flexible platform to keep track of the many updates to the 14 overarching standards. As well as being easier to search, it comes with a “time traveller” feature, allowing users to move forward or backward through time to see what Basel III will look like, or did look like, on particular dates.

The Basel Committee said the “consolidated” format had not led to any major changes to the framework. But it added it had “taken the opportunity” to simplify standards where possible, clarify provisions, integrate answers to frequently asked questions, and delete redundant clauses.

Preparing the standards in the new format revealed “some inconsistencies”, the committee added, as well as ambiguities that required policy changes. It said such changes are “not substantial”, but it has opened a consultation to give interested parties the opportunity to comment on the full array of changes in one go.

The amendments broadly introduce clarifications in areas such as calculations of output floors up to 2022, buffers, internal modelling and standardised approaches, operational risk, the leverage ratio and Pillar 2 requirements. The full list is available in a (PDF-based) consultation document.

“As the technical amendments proposed in the consultative document are not substantial in nature and, in the committee’s view, contribute to a more coherent prudential framework, the committee will encourage its members to implement the final requirements as soon as possible, and no later than January 1, 2022,” the Basel Committee said.