“While a large amount of policy and implementation work has been completed, we do have some unfinished business – most of which is focused on the measurement of risk-weighted assets.”

Stefan Ingves
Stefan IngvesGovernor of Sveriges Riksbank and Chairman of the Basel Committee on Banking Supervision

“Prudential rules could favour ‘green’ investments and loans, naturally while keeping prudential considerations in mind.”

Valdis Dombrovskis
Valdis Dombrovskis Commission Vice-President Valdis Dombrovskis, responsible for Financial Stability, Financial Services and Capital Markets Union

“So ten years after the crisis, and five years into European banking supervision, it is time to rethink the design of stress tests.”

Andrea Enria
Andrea EnriaChair of the European Central Bank’s Supervisory Board
Prudential Policy

Sharing practical advice with policy makers and bank stakeholders

Providing expertise to policy-makers

EBF working groups in the area of prudential policy
  • Basel IV Task Force aims at securing a European implementation of the Finalisation of Basel III that strikes the right balance between banks’ resilience and financing of the economy.
  • Risk Assessment is an expert group on the risk weighting and credit risk mitigation techniques which are used in the banking sector to allocate capital requirements commensurate to the risk involved.
  • Liquidity Risk was integrated into the Basel Accord after the financial crisis of 2008. This group looks after the prudential ratios that ensure sufficient liquidity in the banking sector.
  • Operational Risk is part of the Basel Accord from its second edition together with credit risk and market risk. This expert group analyses the components of operational risk and the methods of evaluation.
  • Market Risk is an integral part of the Basel Accord. This group engages in the policy discussion about the fundamental review of the trading book and the methods of evaluation of market risk.
  • ALM & IRRBB analyses the implications on prudential requirements associated with future fluctuations of interest rate risk for non-trading exposures.
  • Securitization Prudential seeks a successful revival of the securitization market in Europe based on clear definitions and unbiased prudential requirements for banks as main originators and holders of securitization exposures.
  • Macro-prudential oversight participates in the global and European debate on macro-prudential supervision including the assessment and mitigation of systemic risk.
  • Large Exposures analyses the definition of exposure concentration metrics.
  • Financial Conglomerates takes care of consolidated prudential requirements for banking groups with a presence in wider financial services notably in the insurance business.
  • Own Funds analyses the characteristics and classification of assorted types of loss-absorbing instruments in the bank funding mix.

The implementation of the Final Basel III accord

After the Great Financial Crisis of 2008/09, the Basel Committee on Banking Supervision has developed the Basel III framework. The last piece of the post crisis framework, often referred to as Basel IV, is due to be implemented by 1 January 2023. The European implementation of this regulation is a priority and currently one of the main challenges for the banking sector.

The EBF has a long-standing record of participating in the implementation of global standards in Europe and collaboration with policy-makers will be crucial to ensure that the implementation adheres to the following three principles:

  • No significant increase in bank capital
  • Consideration of EU specificities
  • Maintaining the financing of the economy

EBF position on Basel IV (PDF)

BIS Basel III summary table (PDF)

EBF Advisers
Gonzalo Gasos

Gonzalo Gasos

Senior Director of Prudential Policy & Supervision
Judith Ay

Judith Ay

Senior Policy Adviser - Prudential Policy & Supervision
Francisco Saravia

Francisco Saravia

Senior Policy Adviser - Prudential Policy & Supervision
Lukas Bornemann

Lukas Bornemann

Policy Adviser - Prudential Policy & Supervision
Fabio Parola

Fabio Parola

Policy Adviser - Prudential Policy & Supervision