The EU Commission has adopted a delegated act to postpone until 1 January 2027 the date of application of the remaining part of the Basel III international standards in the EU.
The Fundamental Review of the Trading Book (FRTB) aims to introduce more sophisticated risk measurement techniques, allowing for a closer alignment between capital charges and the actual risks banks are facing in their capital markets activities.
Last year, the Commission adopted a first delegated act to postpone by one year – until 1 January 2026 – the date of the FRTB application in the EU, in order to align its implementation with other major global jurisdictions and to preserve the global level playing field for internationally active European banks in respect to their trading activities.
“We fully support implementing the Basel III standards to safeguard global financial stability,” said financial services Commissioner Maria Luis Albuquerque: “Hesitations elsewhere are worrying, but the EU shall not participate in a race-to-the-bottom. At the same time, we should remain vigilant to ensure EU banks remain competitive globally and within the European market, in line with the Savings and Investments Union objectives.”
Recent international developments have indicated further delays in the Basel III implementation by some major global jurisdictions. Concerns regarding the international level playing field and the impact on EU banks remain high, says the EU executive. Based on the responses to a recent public consultation and its own technical assessment, the Commission has as a consequence decided to propose the delay by a further year the date of the implementation of the FRTB capital requirements, until 1 January 2027.
This delegated act is now subject to the scrutiny of the European Parliament and Council for a period of 3 months (that can be extended for another 3-month period).
