Coverage: weekly note · Information to 20 July 2026
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TGB Weekly Research Note · 20 July 2026
UK Basel 3.1 rules and the EU's adjusted market-risk regime both apply from 1 January 2027, while the US re-proposal, in the Commission's assessment, gives no clarity on first application.
The desk view
The PRA's Basel 3.1 rules take effect on 1 January 2027, and a Commission delegated regulation adopted on 4 June 2026 applies from the same date, easing EU market-risk requirements until 31 December 2029. The US agencies' 19 March 2026 proposals would lower Category I and II banks' aggregate CET1 requirements by 2.4% and leave out the 72.5% output floor. On 17 July 2026 the Commission said it would assess the impact of the output floor and propose legislation by the first quarter of 2027. In our reading, 2027 is when divergence moves from timetables into capital requirements.
Three timetables converge on 2027
The PRA delayed Basel 3.1 in January 2025 to 1 January 2027 to allow more time for clarity on US plans, while keeping full implementation at 1 January 2030. Its final rules, PS1/26, take effect on that date; the internal model approach for market risk follows on 1 January 2028.
The EU has applied Basel III since 1 January 2025, but its trading-book rules (the FRTB) were postponed twice, to 1 January 2027, and the second postponement was the last the Commission could make. On 4 June 2026 it chose adjustment over delay, with relief that runs until 31 December 2029.
The Commission notes that the US re-proposed its Basel III rules on 19 March 2026 for a 90-day consultation without clarity on first application. The proposal itself asks how long should elapse between a final rule and its effective date, while its draft text carries a bracketed placeholder of 1 January 2027 for an AOCI transition. The Federal Reserve Board voted on 4 February 2026 to keep current stress capital buffers until 2027, when new requirements can be calculated with models that reflect public feedback; the 24 June 2026 stress test results left requirements unchanged.
Final Basel III reforms: where the three jurisdictions stand
| Item | EU | UK | US |
|---|---|---|---|
| Market risk (FRTB) | From 1 January 2027, relief to 31 December 2029 | Internal models from 1 January 2028 | Proposed; no first application date |
| Output floor | Binds 33 banks fully loaded (2 at December 2025) | Introduced | Not included |
| Estimated capital effect | Tier 1 minimum +4.7% fully loaded | Tier 1 up less than 1% by 2030 | CET1 -2.4% for Category I and II |
Source: European Commission, Delegated Regulation C(2026) 3647 on market risk, 4 June 2026; Bank of England PRA, PS1/26 – Implementation of Basel 3.1: Final rules, 20 January 2026; European Banking Authority, Q4 2025 Risk Dashboard and CRR3/CRD6 dashboard press release, 23 March 2026; Federal Register, Basel III proposed rule, FR Doc 2026-05959, 27 March 2026; Bank of England PRA, PS9/24 – Implementation of the Basel 3.1 standards near-final part 2, 12 September 2024; Federal Reserve Board, Staff memo on the capital proposals, 19 March 2026.