The Deloitte CRR III Survey assesses the state of 52 participating banks, including 10 banks from the Nordic region. The participants, including members of the risk, capital management and finance teams in banks, expect the adjustments required to implement CRR III to go beyond an update to the calculation of Risk Weighted Assests (RWAs) and regulatory reporting engines. Broader strategic implications and/or significant adjustments to the IT environment need to be addressed, in addition to achieving compliance. However, as compliance with the requirements is mandatory, with implementation activities needing to intensify in 2023, for banks to achieve a high quality, fit for purpose and timely outcome.
This is the third publication in the “Basel 3.1 – Nordics ready!” blog series. The series covers aspects of Basel 3.1 where bank management teams in the Nordic region are focused, including minimum capital requirements, the regulatory landscape, the strategic and operational considerations, and how to implement Basel 3.1 for the long term.
Explore other related articles
1. Now is the time to act on Basel 3.1 implementation
2. Capital requirement calculations under Basel 3.1
3. Deloitte CRR III Survey results
4. The Basel 3.1 impact on strategy and operations in the Nordics
Overall, our CRR III Survey shows that at the time results were collected (mid-2022), most banks had not started implementation projects, with plans in place to kick-off implementation projects no later than 2023. The new Basel 3.1 rules are expected to result in greater complexity, so management teams should be conscious of balancing the benefits of a later start to implementation activities (e.g. greater regulatory clarity) with the reduced time available to understand and mitigate the drivers of the expected changes associated with a shorter implementation project timeline.
The full CRR III Survey results are available for download to the right.
Key takeaways
Survey design and data basis
Capital impact and drivers
Strategic impact of future capital requirements
Figure 1: Expected areas where action is needed in response to the new capital adequacy requirements split by Nordic and overall respondents.
Figure 2: Expected strategies split by the total assets of the respondent
Implementation of the new rules
Benefits from IRB
We will continue our blog series with a focus on the strategic and operational considerations related to Basel 3.1 as well as an overview of the regulatory landscape in the Nordics. Stay also tuned for the publication of our white paper “To be or not to be IRB” in the coming weeks. If you have any questions or challenges to discuss about these topics, please do contact us.