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Basel 3 or Basel 4? Where do we stand

Prometeia insights - White paper


Basel 3 or Basel 4: where do we stand?

On December 7th 2017 the Basel Committee on Banking Supervision (BCBS) disclosed the new rules completing Basel 3 reforms. At the press conference announcing the achievement, the new set of rules (also known as “Basel 4”) was presented by Mario Draghi as “the end of the game”.

A key objective of the revisions is to reduce the excessive variability of risk-weighted assets (RWAs) among different banks and jurisdictions by applying the principles of simplicity, comparability and risk sensitivity already outlined in 2013.

This paper analyzes the proposed changes to the approaches for credit risk and Prometeia’s view on the implementation of these new rules in the current EU banking regulatory framework.

 
 

Excerpts from this work have been published first on bobsguide.com. The full paper is now available on Risk.net Library.