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Implementing Basel III: Challenges and impact

Background

In response to the global financial crisis, the Basel Committee on Banking Supervision has fundamentally revised the international prudential standards for banks, known as the "Basel framework". The last set of revisions, also called the “finalisation of Basel III reforms”, was agreed in December 2017 and is now in the process of being implemented across jurisdictions.

Objectives

Directorate General for financial stability, financial services and capital markets union organised a conference to discuss the impact and challenges of implementing the finalised Basel III standards in the EU. The conference furthermore aimed to gather ideas on whether new risks or developments that banks face or are going to face would require regulatory action.

Hosted by Vice-President Dombrovskis, this one-day event gathered members of the next Commission, the European Parliament and the Council, high representatives of supervisory authorities and international bodies as well as CEOs and other representatives of financial institutions and multi-national companies from European and third countries. High level speakers and panellists shared their views and stimulate discussions on the future policies for the implementation of the finalised Basel III standards in the EU.

Programme

Programme of the conference

Useful documents

Watch the conference


Agenda

  • 08.00 - 09.15 (Europe/Brussels)

    Registration and welcome coffee

  • 09.15 - 10.00

    Opening remarks & address by:

    • Vice President Valdis Dombrovskis
    • José Manuel Campa (EBA Chair)
  • 10.00 - 11.15

    Panel: "Basel III in a global context"

    The global financial crisis illustrated the interconnectedness of our financial markets and the importance of a common approach to banking regulation. The EU has ever since been at the forefront of international policy making, promoting a multilateral approach and a rules-based global order, continuously and constructively working with its international partners to increase the resilience of the banking system and to ensure a global level playing field. The agreement on the finalisation of the Basel III framework confirmed the commitment of all major jurisdictions to continuing this international regulatory cooperation and completing the post-crisis reforms. The reforms have yet to be implemented by all major jurisdictions. The panel will discuss how Basel III can contribute to greater market integration and explore potential areas for enhanced international cooperation, or where greater flexibility could be envisaged to better address local circumstances.

    1. Moderator: Harald Waiglein (Austrian Ministry of Finance, FSC Chair)
    2. Carolyn Rogers (BCBS, Secretary General)
    3. Pauli Kariniemi (Finnish Ministry of Finance, Director Banking and Finance)
    4. Rupert Schäfer (FINMA, Head of Strategic Services)
    5. Frédéric Oudéa (FBF, President)
    6. Karin Dohm (DB, Global Head of Regulatory Affairs)
    7. Gilles Briatta (Société Générale, Manager of the Service Unit - General Secretary)
    8. Nathalie Errard (Airbus, Head of EU Public Affairs)
  • 11.15 - 11.30

    Keynote address by:

    • Andrea Enria (ECB/SSM, Chair)
  • 11.30 - 12.45

    Panel: "The impacts of Basel III on the EU economy"

    The final Basel III standards address some shortcomings of the current rules thereby increasing the soundness and resilience of the banking sector and consequently financial stability. At the same time, taken together, the reforms could lead to potentially significant increases in capital requirements of EU banks, which arguably could have adverse implications for the competitiveness of the EU banking sector and the financing the economy, at least in the short term. The panel will discuss how to balance these objectives with a view to ensure that EU banking regulation continues to provide the foundations for a stable banking system that will continue to finance adequately a social market economy that works for the people of Europe and its businesses, small and large, in the current economic context.

    1. Moderator: Irene Tinagli (S&D, ECON Chair)
    2. Mario Quagliariello (EBA, Director Economic Analysis and Statistics)
    3. Levin Holle (German Ministry of Finance, Director General, Head of Financial Markets Policy)
    4. Mary-Elizabeth McMunn (CBI, Director of Credit Institutions)
    5. Casper von Koskull (Nordea, former CEO)
    6. Lars Machenil (Chairman of the EBF Banking Supervision Committee, Chairman of the CFO network)
    7. Fiorella Salvucci (Banca Intesa Sanpaolo, Head of Corporate, Sovereign and Fin. Instit. Credit Risk)
  • 12.45 - 14.00

    Lunch break:

    VIP Lunch in Salon, BERL

  • 14.00 - 15.15

    Panel: "A proportionate implementation of Basel III"

    The EU chose to apply Basel standards consistently to all banks according to the single rulebook, which ensures a level-playing field within the single market and forms the foundation of the banking union. To cater for the diversity of the EU banking sector, and to take differences in banks' size, complexity, business model and risk profile into account in the application of the single rulebook, proportionality considerations feature highly in the EU implementation of the international standards. With CRR2/CRD5 the proportionality principle of the rulebook was further strengthened, particularly for smaller banks. The EBA’s estimate of the impact of the final Basel III standards is more limited for smaller banks. Several new discretions in the Basel framework allow retaining methods or approaches that address EU specificities and avoid unnecessary operational burden. Where more risk-sensitivity is introduced in the standardised approaches to calculate capital requirements, banks that favour simplicity can still apply the simpler, more conservative treatment available. The panellists will be invited to share their views on what is needed to ensure a proportionate implementation of Basel III and on the particular challenges for (small) EU banks.

    1. Moderator: Sean Berrigan (FISMA, Deputy Director General)
    2. Othmar Karas (EPP, Vice-President of the EP)
    3. Kerstin af Jochnick (ECB/SSM, Board Member)
    4. Odile Renaud Basso (French Treasury, Director General)
    5. Gerhard Hofmann (EACB, President)
    6. Jordi Gual (CaixaBank, Chairman)
    7. Thierry Philipponnat (Finance Watch, Head of Research and Advocacy)
  • 15.15 - 15.45

    Coffee break

  • 15.45 - 17.00

    Panel: "Basel III – are we done now?"

    Collectively, the Basel III reforms address a number of shortcomings in the pre-crisis regulatory framework and provide a foundation for a resilient banking system that will help mitigate the impact of potential future banking crises and the build-up of systemic vulnerabilities. The panellists will be invited to provide views on whether there are potential other, new risks or aspects that would require regulatory action beyond the implementation of the final Basel III reforms, notably in view of Europe’s transition to climate neutrality and to grasp the opportunities and address the challenges of the new digital age.

    1. Moderator: Martin Merlin (FISMA, Director Bank and insurance)
    2. Costas Stephanou (FSB Head of Financial Stability Analysis)
    3. Rebecca Christie (Bruegel, Visiting Fellow)
    4. Philippe Lamberts (Greens/EFA, Co-President)
    5. Daniel Dăianu (President of the Romanian Fiscal Council and Special Adviser on euro area affairs at the National Bank of Romania)
    6. Gloria Hervás (Santander, Public Policy Director)
    7. Christian Thimann (Athora, Chairman)
  • 17.00 - 17.30

    Closing remarks by:

    • Sean Berrigan (FISMA, Deputy Director General)

Practical information

When
12 November 2019, 9.15 - 17.30 (CET)
Where
Charlemagne Building, Room De Gasperi
Rue de la Loi 170
1000 Brussels
Belgium