Everything you need to know about this major regulatory initiative
Basel IV is a major overhaul of the capital requirements regulation triggered by the BCBS with local implementation in numerous jurisdictions. Basel IV limits the use of internal models by, among others, the introduction of an output floor for internal models. For some risk categories (CVA, operational risk), internal models are completely de-scoped.
While the Basel framework itself became effective on January 1st, 2023, local implementation differs. The EU (subject to final approval), the UK and Switzerland will introduce it in 2025 but the adoption date in other countries (e.g. the US, Bahamas) is still not finalized.
It is important for financial institutions to meet the deadline gradually: this will not only prevent any unpredictable effects of a sudden introduction but also help management to take all the necessary measures in terms of strategy and refinement of profitability targets in advance.
Listen to this on-demand webinar to get started with Basel IV data requirements:
Senior Product Manager Regnology
Senior Product Manager Regnology
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