European Council: Implementation of the Basel III reforms

The end of June 2023 marks an achievement in Basel 3.1. framework (commonly known as “Basel IV”): the EU negotiators reached a provisional agreement on the CRD 6/CRR 3 “Banking Package”.

While the EU package is almost finalized and no further major changes are expected, banks are still lagging behind with the implementation of Basel III reforms.

The revised Capital Requirements Directive and Regulation refine and continue to implement Basel III in the EU by making important amendments in a number of areas including large exposures, leverage ratio, liquidity, market risk, counterparty credit risk, as well as reporting and disclosure requirements. The overall objective of these reforms is to further reduce risks in the banking sector.

In this alert, you will read more about the upcoming regulatory changes under Basel III reforms, key highlights of the European Council’s press release in June 2023, and conclusions.