Basel IV reform – How to successfully implement the reform in
the banking industry?
23 novembre 2020
The Basel IV reform provides the 4th edition of every risk reduction measure. Designed by the Basel Committee in order to reduce risks in the banking industry, the reform is sought through the CRD V Directive and transposed into the CRR II; together they form a proposal enabling the update of the European prudential framework.
The philosophy of the reform is to reduce flexibility given to banks in their measurement of risk and keep them from setting their own rules. Regulators and central banks were concerned about significant differences between banks in terms of how they calculated the risk. In order to fight against that, the BCBS recommends imposing limits on how the banks’ models can diverge towards more prudent calculations.
Here, Adel Tamart, Business Analyst & Consultant Expert, share with you his understanding of the reform while answering the next questions :
- Basel Accords, CRR, CRD … What does it mean?
- Basel IV, simple completion of Basel III or real evolution in risk
- What should the bank change following this reform?
- What is the implementation road map of the reform?
- What is the impact of the new Basel IV requirements on banking institutions?
- How can banks successfully implement the reform?
- Do banks have enough time to get ready for the implementation of the reform (with the Covid-19 pandemic context)?