Concerns raised over deadlines for next round of global banking red tape

Hayley Kirton
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The Third Plenary Session Of The National People's Congress
Progress is being made, but will every country be able to untangle the banking red tape in time? (Source: Getty)

A major global banking body has today warned some member states may not be able to implement the latest tranche of red tape on time.

In its seventh report, the Basel Committee on Banking Supervision at the Bank for International Settlements warned some of the 27 Basel jurisdictions had raised concerns they may not be able to transpose some of the outstanding Basel III rules into domestic law by the deadlines they had previously been given.

Others added local banks might struggle to update their IT systems to be able to report on the requirements before the deadline.

"Delayed implementation may have implications for the level playing field, and puts unnecessary pressure on jurisdictions that have implemented the standards based on the agreed timelines," the report read. "A concurrent implementation of global standards is all the more important, as many jurisdictions serve as hosts to internationally active banks."

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However, the report also noted good progress had been made so far on capital and liquidity requirements, while those jurisdictions with too-big-to-fail banks, including the US, the EU and China, had implemented the appropriate new framework.

Outstanding Basel III measures include the revised disclosure requirements in the Pillar three framework, which are due to be in place by the end of the year. So far, two jurisdictions have a full set of rules in force, while another three have draft rules issued.

The Basel III capital requirements have come under fire recently, particularly from so-called challenger banks.

The smaller banks have voiced concerns the rules would require them to hold a disproportionately large level of capital to lend to the same customer as a larger lender, creating an uneven playing field.

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