The next generation of RWA
Basel IV encompasses more than just finalising Basel III – According to many bank representatives the requirements of the Basel committee have expanded so much in recent years that we must already start referring to Basel IV.
Focus on Capital Requirements for Basel IV
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The implementation of CRR II/CRR III (Basel IV) in the EU represents one of the biggest challenges for financial institutions in the coming years. The introduction of new rules concerning the calculation of risk-weighted assets and thus the capital ratios of all banks will have fundamental impact on the development of banks' strategies and shape their business models of the future.
Meet PwC’s regulatory professionals from the Basel IV Initiative at the CRR II/CRRIII (Basel IV) Academy 2020 in Frankfurt, who will share their broad experience gained in national and international implementation projects at credit institutions and financial service providers to prepare the participants for the upcoming challenges of Basel IV and will answer your questions.
The implementation of the Basel IV framework is already a remarkable challenge for the European banking landscape, as methodologies for the determination of capital requirements are to be revised. In doing so, capital calculations across all risk types will be fundamentally amended.
PwC has already developed numerous thematic solutions and project approach models that will make your bank easier to implement the Basel IV requirements.
The implementation of Basel IV leads to even more extensive data requirements for Basel monitoring exercises and quantitative impact studies
The final implementation of supervisory rules into binding law will be linked to QIS results submitted by banks to their supervisors. It is now up to the banking sector to participate and to reflect challenging impacts arising from upcoming supervisory Basel III- and Basel IV frameworks in order to assure a proportionate implementation of binding regulatory requirements across the sector.
PwC has pre-developed a range of quantitative tools to support your bank in meeting supervisory QIS requirements in an efficient, effective and sustainable manner. See the features of these tools in the following pages.
This webcast includes details on the finalisation of Basel III, the implementation of the Basel IV regulations into CRR II and the resulting challenges for your credit institution.
How PwC can assess the quantitative impact of the Basel IV framework on your portfolio?
Find out more about about the PWC Credit Risk Calculator
Small, useful... and always ready to hand - a perfect guide to Basel IV...
If you have any questions about our Toolbox, please contact your local Basel IV leader.
Our new Basel IV poster offers you an in-depth overview of all regulatory actions of the Basel Committee in relation with Basel IV. Our "Basel IV" poster shows the legal basis, identifies the relevant Basel papers and illustrates the interconnection's between the individual arrangements. By requesting your copy of the poster you receive a compact overview of all "Basel IV" related regulatory activities.
*We continue to update the poster to reflect changes in Basel IV regulation - this version is correct as of April 2018
After the overwhelming global success of the first edition of our Basel IV Book we are proud to announce that the extensively enhanced second edition with additional details, examples and case studies was published on the 8th of August.
This book aims to explain that banks and financial markets are facing a new regulatory framework called "Basel IV" and not just a fine adjustment of the existing Basel III regulations.
The second edition covers all new approaches for the calculation of RWA:
Because of the strong relation to the Pillar I requirements, the second edition covers the topics of interest rate risk in the banking book (IRRBB), large exposures and TLAC again. Additionally, the book contains a detailed description of the Pillar III disclosure requirements.
With the aid of a high-profile team of experts from countries all over the globe, the complexity of the topic is reduced, and important hands-on support is offered.
All the new and finalised regulatory requirements reflected in this second edition and the much higher level of detail make it worthwhile to read, containing the latest updates previously unavailable in the first edition.
For banks, this means that the next steps for efficient implementation must be planned and managed at an early stage and integrated into the organisation’s strategy. PwC can support your bank on the basis of extensive experience gained from different supervisory projects. In the context of Basel IV, we recommend a holistic project approach, divided into thematic modules in order to adequately meet the thematic linkages, as well as identifying and managing the strategic impacts. PwC has already developed numerous thematic solutions and project management models to help banks to implement Basel IV requirements. You can view the variety of PwC solutions here.
On December 7th the Basel Committee for Banking Supervision has published its final documents on the Reform of Basel III which are commonly referred to as "Basel IV".
These reforms comprise - among other issues - reforms of the standardised approach for credit risk, the IRB-approach, the quantification of CVA risk, operational risk approaches and last but not least the final calibration and design of the output floor.
With respect to the consultative papers issued by the Basel Committee the final papers show a significant amount of modifications that will have varying effects on individual banks.
In order to prepare for the upcoming reforms banks will now need to assess the finalised documents with respect to their individual portfolios in order to obtain transparency on the likely effects of the reforms to the business model of the bank.
Partner, Global Basel IV Leader, PwC Germany
Tel: +496 9958 53328
Partner, Global Basel IV Deputy Leader, PwC Netherlands
Tel: +31 612134687