Financial Services Ireland

SURVEY

Global Basel 3 Reforms Survey 2021

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How do you capitalise on capital regulations?

Many regulatory initiatives have been impacted by the Covid-19 pandemic and the implementation of the Basel 3 Reforms is no different. With less than two years for the sector to prepare for the reforms, our third global survey looks at how ready banks are and asks respondents how they are preparing for change.

Findings from the survey, which had 45 participants from the top 100 global banks, show that most banks are well underway, but we are seeing different approaches emerge. The survey uncovered significant differences in firms’ levels of preparedness and our analysis shows that progress is size and region-dependent.

Commenting on the results, Darina Colhoun, Director, Financial Services Consulting said:

Readiness for Basel 3 is proving to be a challenge for firms with varying degrees of preparedness evident from the EY survey. Firms are realising that Basel 3 is not only an issue for Finance and Risk, but that the real challenge is to future-proof frontline business models which will bear the impact of the revised capital, leverage and liquidity requirements in the post-Covid-19 world. Finance and Risk are working to implement the regulatory changes while also supporting their frontline colleagues’ understanding of the regulation and what changes will be necessary.

Key highlights from the findings include:

  • The Covid-19 pandemic and low-interest rates have added further capital pressure to banks as they prepare for the Basel 3 Reforms.
  • With less than two years to go to the deadline, we have uncovered significant differences in firms’ levels of preparedness.
  • Our analysis shows that progress is highly size-dependent, and findings also vary by region.

Although this is a regulatory-driven change, business and commercial impacts continue to top banks’ priorities. The vast majority of respondents continue to view the Basel 3 Reforms as an opportunity to change their business operations more fundamentally and deliver additional business transformation.

Download the report below and don’t hesitate to reach out if you have a question. You may also be interested in attending our upcoming webcast on this topic.

Cormac Murphy

Banking & Capital Markets, Sector Leader
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