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Expected timeline of Basel III implementation

Timeline of Basel III implementation

Capital requirements

The national implementation will start on 1 January 2013. Thus, legislation and regulations will have to be amended during the period prior to that date. From 1 January 2013 onwards, banks will have to meet the following minimum capital requirements expressed in risk-weighted assets: 3.5% share capital, 4.5% Tier-1 capital and 8% total capital. During the transitional period from 1 January 2013 up to and including 2019, these ratios will gradually be stepped up to 4.5% share capital, 6% Tier-1 capital and 8% total capital.

The conservation buffer will be build up along gradual lines to a percentage of 2.5%. from 1 January 2016 through 1 January 2019. Thus, banks will ultimately have to hold 10.5% of their total capital expressed in risk-weighted assets.

National supervisors will gradually introduce additional allowable deductions from bank capital such as deferred tax assets and investments in financial institutions from 1 January 2014 through 1 January 2018.

Leverage ratio

As regards the introduction of the Leverage Ratio, from 1 January 2011 onwards the supervisor will concentrate on the development of templates to consistently monitor the components of this ratio. The period from 1 January 2013 through 1 January 2017 will be a parallel run period. During this period, the development of the Leverage Ratio will be monitored. The intention is to migrate the Leverage Ratio into the Pillar 1 requirements as from 1 January 2018.

Liquidity ratio

As from 2011, the Liquidity Coverage Ratio will be monitored by both the Basel Committee and the supervisor in order to officially make it mandatory with effect from 1 January 2015. The Net Stable Funding Ratio will be introduced as a minimum standard as from 1 January 2018.

Contact

Eelco Schnezler
Director
Financial Risk Management
+31 (0)88 288 52 20
+31 (0)6 12 34 51 58
eschnezler@deloitte.nl
LinkedIn Eelco Schnezler
Basel III contacts

Related links

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