Coverage: Q3 2026 · Information to 13 August 2026
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TGB Quarterly Thematic Intelligence Report · 13 August 2026
The last leg of the post-crisis capital reforms is being completed jurisdiction by jurisdiction, but the United States has proposed lower requirements for its largest banks, the European Commission has adopted a multiplier for its trading-book rules and the Bank of England has lowered its capital benchmark, turning a common standard into a contest over calibration.
The desk view
The final Basel III reforms were due on 1 January 2023, and about 75% of Basel Committee member jurisdictions have now implemented them or will shortly do so. What remains is not drafting but calibration, and each major jurisdiction is now calibrating with an eye on the others. In March 2026 the US agencies proposed a package that, with stress-test changes, would on Fed staff estimates cut CET1 requirements for the largest US banks by 4.8%. In June 2026 the European Commission adopted a multiplier to offset FRTB capital impacts for three years from 1 January 2027, citing expected delays elsewhere. The UK goes live on 1 January 2027 with its internal market-risk models deferred to 1 January 2028. Our reading is that capital is becoming a variable in where banks book business, not only how much they hold.
The final mile is about calibration, not text
The internationally agreed date for the final Basel III package was 1 January 2023, and more than three years on the reforms are still arriving in instalments. When the Basel Committee's oversight body, the Group of Central Bank Governors and Heads of Supervision (GHOS), met on 9 March 2026, it said about 75% of member jurisdictions had implemented, or would shortly implement, the outstanding standards, and that the remaining jurisdictions had communicated their plans. It reaffirmed its expectation of full and consistent implementation by all members as soon as possible.
The aggregate figure hides an uneven pattern by risk type. The Basel Committee's progress report on end-September 2025 found the revised credit risk and operational risk standards and the output floor in effect in around 80% of its 27 member jurisdictions, the credit valuation adjustment (CVA) standard in nearly 70% and the revised market risk standards in nearly 40%. The trading book is therefore the part of the package that lags furthest behind, and it is also the part that supervisors explicitly link to international competitiveness.
That makes the final mile a question of sequencing. The United States, the EU and the UK have each made competitiveness an explicit part of the case: the Federal Reserve's Vice Chair for Supervision argued that over-calibration can harm bank competitiveness, the European Commission cited expected delays in other major jurisdictions to adjust its market risk rules, and the Prudential Regulation Authority (PRA) deferred internal models for market risk, citing uncertainty over timing elsewhere. Supervisors still insist on the principle: the European Central Bank's Governing Council said in December 2025 that all jurisdictions should ensure full, timely and faithful implementation of Basel III.
The capital at stake in aggregate is modest. In the Basel Committee's monitoring exercise on June 2025 data, published on 24 March 2026, the average CET1 ratio of large internationally active (Group 1) banks was 13.9%, and full phase-in of the final standards would raise their Tier 1 minimum required capital by 1.7%. The distribution of that impact is what matters for competition, because it differs sharply by region and by business line.