19 November 2014

Modified Basel minimum standards: implementation plan

The Basel minimum standards on capital requirements and risk diversification at banks have been adjusted in a number of areas. FINMA will implement those changes according to the international timelines.

During the past year, the Basel Committee on Banking Supervision made the following four changes to its minimum standards:

  1. Capital requirements for banks‘ equity investments in funds held in the banking book have been revised.

  2. A new standardised approach for measuring counterparty credit risk exposures has replaced both the current exposure method and the rarely used standardised method of the current framework.

  3. Capital requirements for bank exposures to central counterparties have been changed.

  4. For the first time, detailed international standards on risk diversification have been introduced.

As the prudential requirements for Swiss banks are generally based on the Basel standards, FINMA will implement those standards according to the international timelines. The new standards on risk diversification should therefore come into force on 1 January 2019, while all other changes are scheduled for 1 January 2017. In coordination with the Federal Department of Finance FDF, a public consultation on the required revision of FINMA Circular 08/19 "Credit risks – Banks" and the Capital Adequacy Ordinance will be held in 2015. The draft documents will also be discussed in the current national work group, "Basel III capital requirements".