Basel reforms in Asia

Implementing post-crisis agenda

In January 2019, the Hong Kong Monetary Association ("HKMA") issued a circular to all locally incorporated Authorized Institutions ("AI"), urging them to start working on their firm-specific Fundamental Review of Trading Book ("FRTB"), based on the recent publication by the Basel Committee on Banking Supervision ("BCBS") on its new minimum capital requirements for market risk. These changes, together with the final revisions of Basel III on capital and liquidity requirements, have an implementation deadline of January 2022.

Amongst a number of changes, one specific area that will bear most challenges and close monitoring in relation to implementation will be the revisions to the market risk framework, otherwise referred to as FRTB. Given the complexity of the framework and the system challenges in implementation, there are significant ongoing debate and delays in finalisation at the national level including in the Asia-Pacific region.

While commitment to the principles of Basel and the objectives of Basel III remains, it would appear that the risk of regulatory fragmentation has increased. The focus now has turned to national implementation of the agreed-upon package and we are likely to see increased risk of regulatory fragmentation.

Basel Reform services

Deloitte’s Risk Advisory team is working with players across the banking and capital markets segments to assist them with the Basel implementation programmes. To find out more, please contact our expert listed below.

The Deloitte Centre for Regulatory Strategy

The Centre for Regulatory Strategy is a source of critical insight and advice, designed to help clients to anticipate change and respond with confidence to the strategic and aggregate impact of national and international regulatory policy.

With regional hubs in the Americas, Asia Pacific and EMEA, the Centre combines the strength of Deloitte’s network of experienced risk, regulatory, and industry professionals—including a deep roster of former regulators, industry specialists, and business advisers—with a rich understanding of the impact of regulations on business models and strategy.

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