Basel III Deadline May Be Missed by Some States, Ingves Says

Some nations will miss a January deadline to start implementing so-called Basel III capital and liquidity rules, the head of the Basel Committee on Banking Supervision said in a report published today.

“It is clear that not all jurisdictions will be ready in time,” said Stefan Ingves, the Basel group’s chairman, in a statement today. “Still, we see continuing signs of progress.”

Turkey and Argentina are furthest behind with rulemaking among the countries surveyed, according to today’s report by the global group of central bankers and regulators. China, Japan and Singapore have already published final rules, while the European Union and U.S. are also stuck on draft regulations.

Lawmakers are struggling to meet the deadline for implementing the new standards, which more than triple the core capital that lenders must have to stave off insolvency and require banks to build up buffers of easy-to-sell assets. The Basel group agreed in 2010 that the measures should be phased in from the start of next year, with full implementation from 2019.

The largest global banks would have needed an extra 374.1 billion euros ($484.4 billion) in their core reserves to meet Basel III had the standards been enforced at the end of 2011, according to data published by the committee last month. Nearly 200 billion euros of the collective shortfall was at banks in the 27-nation EU.

Core Capital

Ingves, who is also governor of Sweden’s central bank, announced last year that the Basel committee would organize peer review teams to assess how well authorities and banks comply with Basel III.

For the EU, the peer review said that the bloc’s draft rules on what counts as core capital are insufficiently detailed and robust. The review also cited concerns that capital rules for so-called bancassurers, lenders with insurance arms, wouldn’t be as tough as the Basel standards.

Michel Barnier, the EU’s financial services chief, said that “extensive information and clarifications” provided to the Basel committee by EU regulators had “only been partly reflected” in the review on the bloc’s implementation plans.

The Basel group brings together regulators from 27 nations including the U.S., U.K. and China.

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