The standards, known as “Basel Endgame” in the U.S., update rules drawn up after the 2007-8 financial crisis, and aim to bolster bank safety by ensuring financial institutions have sufficient reserves when they lend. While they were agreed in 2017 by global regulators in the Basel Committee on Banking Supervision, jurisdictions around the world have written their own versions of the standards since they are not legally binding.
The European version is set to apply on Jan. 1, 2025. In theory, that would be six months earlier than the U.S. and U.K., but in practice, there could be further delays and changes in the U.S., prompting the EU to consider looking again at what it pushes into law.
Transitional arrangements until 2032
The EU’s legal texts implementing the standards have been agreed by the bloc’s governments and the European Parliament but not yet officially approved. They include a mandate for the Commission to alter the part of the rules that cover market risk, known as FRTB, if needed to create a level playing field with other jurisdictions.
European banks are pushing the Commission behind the scenes to use this power once the texts are finalized.
The EU could also use its long phase-in period — its legal texts set out “transitional arrangements” until 2032 — to give it “time to adapt to international developments, if needed,” the Commission spokesperson said.
The EU is currently still “finalizing the implementation of the Basel III standards in accordance with the deadline we have publicly communicated, i.e. apply the standards on 1 January 2025,” the spokesperson said, adding that the January date was “an important signal globally.”
