Basel III Endgame vs. Basel 3.1 Rules Split

The debate over Basel III Endgame in the United States and Basel 3.1 in Europe and the UK highlights a critical split in how major economies are implementing the latest round of global banking reforms. Both frameworks stem from the original Basel III standards introduced after the 2008 financial crisis, designed to strengthen banks’ capital adequacy, reduce systemic risk, and ensure financial stability. However, the U.S. approach—referred to as the “Basel III Endgame”—is taking a more conservative stance, imposing higher capital requirements on large banks, particularly in trading, derivatives, and operational risk exposures.

By contrast, the EU and UK under Basel 3.1 are pursuing a more flexible path, opting for gradual implementation and transitional measures to protect lending capacity and competitiveness of their banking sectors. European regulators have been more willing to allow adjustments, such as maintaining the use of internal models for certain risk-weight calculations, while the U.S. proposals emphasize standardized approaches that limit banks’ discretion and potentially raise capital buffers more sharply.

Jessica Wright

Junior Editorial

Email: jessica.wright@theempiretimes.org

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