Regulatory Alerts2020-12-01
Regulatory Capital Transitional Provisions for Basel III Implementation
The Supervisor of Banks issued this directive to establish transitional periods for banking corporations to comply with new Basel III regulatory capital requirements. It mandates the gradual deduction of specific capital adjustments and deductions from Common Equity Tier 1 capital between 2014 and 2018, while allowing partial add-backs for initial US GAAP accounting changes over three years. The document further defines phased recognition caps for capital instruments that no longer qualify under new criteria and sets out specific treatment rules for minority interest and instruments with redemption incentives.
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