Beyond Basel III: What Does Basel IV Promise?

• By: Staff Editor
• Date: November 11, 2016
• Source: http://www.reuters.com/article/us-germany-banks-idUSKBN1321C8?il=0

Credit risk, market risk, operational risk, counterparty credit risk, interest rate risk, and capital floors – a list of things on the itinerary for Basel IV. While yet adjusting to the requirements of Basel III, the newer legislation will hit the financial market soon enough, bringing with it a flurry of rules to mitigate any signs of a financial crisis akin to the 2007-2009 collapse.

Basel IV reaches up and sets the bar higher for capital adequacy – a move that has caused much discomfort in the EU financial industry. While the initially discussed model sought to increase the capital requirements of European banks by around 90 percent, talks are on for a number between 30 and 50 percent – a percentile still too high for comfort.

The journey from Basel II to Basel IV has been a sharp route. The BdB (German banking association) has weighed in and called for an extension to the Basel IV timetable while the Basel Committee, comprising of bank supervisors from nearly 30 countries, intends to deliver the new Basel IV rules by the end of the year.

A quick look at why the industry needs to look Beyond Basel III: Necessary Solutions for Capital and Liquidity

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Basel III – What's new vs. Basel II