Completion of Basel III Reforms Close

Bill Coen, Secretary General of the Basel Committee on Banking Supervision, said during his recent speech in London that the Basel III reforms will be finalized "in the near future" and would have a lengthy implementation period, possibly running to 2025, according to a recent Financial Times article. He added that a thorny technical debate was now much more narrowly focused, with one piece of unfinished business relating to the calibration of the output floor. Coen explained that the "existing floor references the Basel I risk-weighting system, (so) it clearly needed to be updated to accord with the most up-to-date standardized approaches."

"Recall that in 2010, the committee adopted 2019 as the date by which the Basel III requirements needed to be fully phased in. I suspect a similar approach will be taken for this set of revisions," Mr. Coen stated. "I am hopeful that we can finalize the reforms in the near future."

As the Financial Times explains, the U.S. Federal Reserve Chair Janet Yellen and Treasury Secretary Steven Mnuchin have been instrumental in moving along discussions, according to people familiar with the situation. ‎There is also pressure to have the reforms finalized by the next meeting of the G20 group of nations in July.

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