The European Commission has started a consultation regarding the implementation of the reforms to finalise Basel III. The respective BCBS paper was published by the Basel Committee on Banking Supervision (BCBS) in December 2017. The Commission seeks input from stakeholders on how the reforms might affect the European banking sector and what kind of implementation challenges exist. Precisely, the consultation paper addresses the new approaches for credit risk, CVA risk, operational risk and the output floor. This consultation is the first part of a thorough impact analysis which the European Commission plans to conduct before amending the Capital Requirements Regulation (CRR).
The Commission is not only dealing with general questions about impacts and challenges of implementing the Basel III reforms. Moreover, the commission raises the question of a potential elimination of the exemption of certain counterparties from own funds requirements for CVA risk. According to article 382 of the CRR, for instance derivative trades with non-financial counterparties below the clearing thresholds (NFC-), as well as cleared derivatives and intragroup transactions are excluded from the own funds requirements for CVA risk.
As the published document is only an exploratory consultation and not linked to a legislative proposal the consultation period already ends on 12 April 2018.
The consultation paper and further information can be found here:
After studying German literature, psychoanalysis and philosophy in Frankfurt, you may not necessarily work in the financial sector, but you may feel surprisingly comfortable there. Eva Schnürer has been responsible for LPA’s marketing since September 2017 and is also in charge for internal and external communications.