Basel IV

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.

Basel IV - The next generation of RWA

  •  Finalising Basel III and evolving Basel IV
  • The details of the latest regulatory requirements
  • This page takes a look at your challenges and our solutions 

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 Solutions

PwC has already developed numerous thematic solutions and project approach models that will make your bank easier to implement the Basel IV requirements.

Basel III monitoring and Basel IV impact analysis – Are you prepared?

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.

Download the flyer

CRR II Webcast

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.
 

Click here for further information on the CRR II webcast 

 

Basel IV webcast

As the Basel committee continues its drive to strengthen the regulation, supervision and practices of banks worldwide, the committee has produced, and continues to produce a number of consultation and discussion papers which point to a significant revision of the Basel Framework. This revision may well be considered “Basel IV”.

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Basel IV Calculation tool

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

Contact Martin Neisen for a further demo of the tool

 

Credit Risk Calculator

Basel IV Channel: Credit Risk Calculator

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Basel IV Toolbox

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.


Click here for more information on the Basel IV Toolbox

Download the Basel IV Toolbox

Basel IV poster

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.

Contact your local PwC Basel IV Territory Leader for a copy

View our Basel IV Poster

Please note this poster is for illustrative purposes only and therefore non printable - please contact your local Basel contact who will provide a hard copy. 
Please note this poster is for illustrative purposes only and therefore non printable - please contact your local Basel contact who will provide a hard copy. 

*We continue to update the poster to reflect changes in Basel IV regulation - this version is correct as of April 2018 

Basel IV book: The reference book for those who need more detail

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: 

  • the standardised approach (CR-SA) and the IRB approach for credit risk, 
  • the new standardised approach for counterparty credit risk (SA-CCR), 
  • both the standardised approach and internal models approach from the "fundamental review of the trading book" (SBA and IMA)
  • the basic approach (BA-CVA) and standardised approach (SA-CVA) for the CVA risk, 
  • all new approaches (SEC-IRBA, SEC-ERBA, SEC-SA, IAA) for securitisations (incl. STS), 
  • the approaches for the calculation of RWA for equity positions in investment funds (LTA, MBA, FBA)
  •  the new standardised approach for operational risk (SA-OpRisk)

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. 

What does this mean for banks?

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.

‘Basel IV’: Big bang or the endgame of Basel III?

BCBS finalises reforms on Risk Weighted Assets (RWA) - The Basel Committee on Banking Supervision’s announcement – December 2017

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.

To hear our experts thoughts on the new Basel reforms, the impacts for banks and how PwC can help please listen to the latest Basel IV international channel or download the Basel IV summary.

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Contact us

Martin Neisen

Partner, Global Basel IV Leader, PwC Germany

Tel: +496 9958 53328

Abdellah M’Barki

Partner, Global Basel IV Deputy Leader, PwC Netherlands

Tel: +31 612134687

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