Basel 3.1 - Revision history

Doug: Layout.

2025-02-09T04:34:38Z

Layout.

← Older revision		Revision as of 04:34, 9 February 2025
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	==Other resources==		==Other resources==
	*[https://www.bankofengland.co.uk/news/2025/january/the-pra-announces-a-delay-to-the-implementation-of-basel-3-1?utm_source=Bank+of+England+updates&utm_campaign=da758c9acd-EMAIL_CAMPAIGN_2025_01_17_09_08&utm_medium=email&utm_term=0_-da758c9acd-111026481&_cldee=FAjAIqc2Yym7a_m5z0P5Uzw_eYUs7rFIS58Cz05tLCZnzm1EpL3k9ebQ9EySXeIx&recipientid=contact-61e01a18fd04e61180d1000d3ab15408-1d100a4342ce4455a29da8125090f716&utm_source=ClickDimensions&utm_medium=email&utm_campaign=NEWS-MEM-20&esid=3547f998-dde2-ef11-9342-000d3a7f76f1 PRA press release - January 2025		*[https://www.bankofengland.co.uk/news/2025/january/the-pra-announces-a-delay-to-the-implementation-of-basel-3-1?utm_source=Bank+of+England+updates&utm_campaign=da758c9acd-EMAIL_CAMPAIGN_2025_01_17_09_08&utm_medium=email&utm_term=0_-da758c9acd-111026481&_cldee=FAjAIqc2Yym7a_m5z0P5Uzw_eYUs7rFIS58Cz05tLCZnzm1EpL3k9ebQ9EySXeIx&recipientid=contact-61e01a18fd04e61180d1000d3ab15408-1d100a4342ce4455a29da8125090f716&utm_source=ClickDimensions&utm_medium=email&utm_campaign=NEWS-MEM-20&esid=3547f998-dde2-ef11-9342-000d3a7f76f1 PRA press release - January 2025]
	*[https://www.treasurers.org/hub/technical/trade-finance-update-february-2023 Potential rise in the cost of performance guarantees due to Basel 3.1 - ACT]		*[https://www.treasurers.org/hub/technical/trade-finance-update-february-2023 Potential rise in the cost of performance guarantees due to Basel 3.1 - ACT]

	~~[[Category:Accounting,_tax_and_regulation]]~~
	~~[[Category:Corporate_finance]]~~
	~~[[Category:Financial_products_and_markets]]~~
	~~[[Category:Identify_and_assess_risks]]~~
	~~[[Category:Investment]]~~
	~~[[Category:Long_term_funding]]~~
	~~[[Category:Manage_risks]]~~
	~~[[Category:Risk_reporting]]~~
	~~[[Category:Risk_frameworks]]~~
	~~[[Category:The_business_context]]~~
	~~[[Category:Trade_finance]]~~

	[[Category:Accounting,_tax_and_regulation]]		[[Category:Accounting,_tax_and_regulation]]

Doug: Add treasury relevant quote and resource.

2025-02-09T04:34:01Z

Add treasury relevant quote and resource.

← Older revision		Revision as of 04:34, 9 February 2025
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	Basel 3.1 has particular significance in relation to the calculation of Risk Weighted Assets by banks, and related costs for their corporate customers.		Basel 3.1 has particular significance in relation to the calculation of Risk Weighted Assets by banks, and related costs for their corporate customers.


			:<span style="color:#4B0082">'''''UK implementation of Basel 3.1 delayed to 1 January 2027'''''</span>

			:"The Prudential Regulation Authority (PRA), in consultation with HM Treasury, has decided to delay the implementation of Basel 3.1 in the UK by one year until 1 January 2027.

			:This allows more time for greater clarity to emerge about plans for its implementation in the United States."

			:''PRA press release - January 2025.''


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	* [[Credit rating]]		* [[Credit rating]]
	* [[Guarantee]]		* [[Guarantee]]
			* [[HM Treasury]]
	* [[Obligor]]		* [[Obligor]]
	* [[Off balance sheet risk]]		* [[Off balance sheet risk]]
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	* [[Pillar 2]]		* [[Pillar 2]]
	* [[Pillar 3]]		* [[Pillar 3]]
	* [[Prudential Regulation Authority]]		* [[Prudential Regulation Authority]] (PRA)
	* [[Retention bond]]		* [[Retention bond]]
	*[[Risk Weighted Assets]] (RWAs)		*[[Risk Weighted Assets]] (RWAs)
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	==Other ~~resource~~==		==Other resources==
			*[https://www.bankofengland.co.uk/news/2025/january/the-pra-announces-a-delay-to-the-implementation-of-basel-3-1?utm_source=Bank+of+England+updates&utm_campaign=da758c9acd-EMAIL_CAMPAIGN_2025_01_17_09_08&utm_medium=email&utm_term=0_-da758c9acd-111026481&_cldee=FAjAIqc2Yym7a_m5z0P5Uzw_eYUs7rFIS58Cz05tLCZnzm1EpL3k9ebQ9EySXeIx&recipientid=contact-61e01a18fd04e61180d1000d3ab15408-1d100a4342ce4455a29da8125090f716&utm_source=ClickDimensions&utm_medium=email&utm_campaign=NEWS-MEM-20&esid=3547f998-dde2-ef11-9342-000d3a7f76f1 PRA press release - January 2025
	*[https://www.treasurers.org/hub/technical/trade-finance-update-february-2023 Potential rise in the cost of performance guarantees due to Basel 3.1 - ACT]		*[https://www.treasurers.org/hub/technical/trade-finance-update-february-2023 Potential rise in the cost of performance guarantees due to Basel 3.1 - ACT]

			[[Category:Accounting,_tax_and_regulation]]
			[[Category:Corporate_finance]]
			[[Category:Financial_products_and_markets]]
			[[Category:Identify_and_assess_risks]]
			[[Category:Investment]]
			[[Category:Long_term_funding]]
			[[Category:Manage_risks]]
			[[Category:Risk_reporting]]
			[[Category:Risk_frameworks]]
			[[Category:The_business_context]]
			[[Category:Trade_finance]]

	[[Category:Accounting,_tax_and_regulation]]		[[Category:Accounting,_tax_and_regulation]]

Doug: Add links.

2024-02-26T22:48:37Z

Add links.

← Older revision		Revision as of 22:48, 26 February 2024
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	* [[Off balance sheet risk]]		* [[Off balance sheet risk]]
	* [[Performance guarantee]]		* [[Performance guarantee]]
			* [[Pillar 1]]
			* [[Pillar 2]]
			* [[Pillar 3]]
	* [[Prudential Regulation Authority]]		* [[Prudential Regulation Authority]]
	* [[Retention bond]]		* [[Retention bond]]
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	==Other resource==		==Other resource==
	[https://www.treasurers.org/hub/technical/trade-finance-update-february-2023 Potential rise in the cost of performance guarantees due to Basel 3.1 - ACT]		*[https://www.treasurers.org/hub/technical/trade-finance-update-february-2023 Potential rise in the cost of performance guarantees due to Basel 3.1 - ACT]

	[[Category:Accounting,_tax_and_regulation]]		[[Category:Accounting,_tax_and_regulation]]
	~~[[Category:The_business_context]]~~
	[[Category:Corporate_finance]]		[[Category:Corporate_finance]]
			[[Category:Financial_products_and_markets]]
			[[Category:Identify_and_assess_risks]]
	[[Category:Investment]]		[[Category:Investment]]
	[[Category:Long_term_funding]]		[[Category:Long_term_funding]]
	~~[[Category:Identify_and_assess_risks]]~~
	[[Category:Manage_risks]]		[[Category:Manage_risks]]
			[[Category:Risk_reporting]]
	[[Category:Risk_frameworks]]		[[Category:Risk_frameworks]]
	[[Category:~~Risk_reporting]]~~		[[Category:The_business_context]]
	~~[[Category:Financial_products_and_markets~~]]
	[[Category:Trade_finance]]		[[Category:Trade_finance]]

imported>Doug Williamson: Remove surplus text.

2023-03-01T22:23:05Z

Remove surplus text.

← Older revision		Revision as of 22:23, 1 March 2023
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	:The proposal is to increase this from 20% CF to 50% CF.		:The proposal is to increase this from 20% CF to 50% CF.

	:The CF defines the probability that a contingent liability exposure (such as a performance guarantee) will convert to an on balance sheet ~~obligation~~ for the bank ~~when a claim is made by the beneficiary and the obligor fails to make payment under the guarantee~~.		:The CF defines the probability that a contingent liability exposure (such as a performance guarantee) will convert to an on balance sheet item for the bank...

imported>Doug Williamson: Add links.

2023-02-26T17:01:42Z

Add links.

← Older revision		Revision as of 17:01, 26 February 2023
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	* [[Prudential Regulation Authority]]		* [[Prudential Regulation Authority]]
	* [[Retention bond]]		* [[Retention bond]]
			*[[Risk Weighted Assets]] (RWAs)
	* [[Standard & Poor's]] (S&P)		* [[Standard & Poor's]] (S&P)

imported>Doug Williamson: Layout.

2023-02-26T16:57:30Z

Layout.

← Older revision		Revision as of 16:57, 26 February 2023
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	===Other ~~links=~~==		==Other resource==
	[https://www.treasurers.org/hub/technical/trade-finance-update-february-2023 Potential rise in the cost of performance guarantees due to Basel 3.1 - ACT]		[https://www.treasurers.org/hub/technical/trade-finance-update-february-2023 Potential rise in the cost of performance guarantees due to Basel 3.1 - ACT]

imported>Doug Williamson: Create page - source - ACT - https://www.treasurers.org/hub/technical/trade-finance-update-february-2023

2023-02-26T16:56:54Z

Create page - source - ACT - https://www.treasurers.org/hub/technical/trade-finance-update-february-2023

New page

''Bank supervision - UK''.

In the UK context, Basel 3.1 means the elements of Basel III that had not already been implemented in the UK by 2021.

Basel 3.1 has particular significance in relation to the calculation of Risk Weighted Assets by banks, and related costs for their corporate customers.

:<span style="color:#4B0082">'''''What is changing?'''''</span>

:"One key change which will impact corporates is the conversion factor (CF) associated with performance guarantees (incl. bid bond, advance, performance & retention guarantees).

:The proposal is to increase this from 20% CF to 50% CF.

:The CF defines the probability that a contingent liability exposure (such as a performance guarantee) will convert to an on balance sheet obligation for the bank when a claim is made by the beneficiary and the obligor fails to make payment under the guarantee.

:The capital that the bank is required to keep for performance guarantees is linearly proportional to the CF and it is likely that banks will need to pass on this additional capital charge.

:For example, for a corporate with an external S&P rating of ‘A’, if the existing pricing for such a performance guarantee was 0.4%, this would increase to 1%."

:''Naresh Aggarwal, Associate Director, Policy & Technical, ACT - February 2023.''

== See also ==
* [[Advance payment bond]]
* [[Bank supervision]]
* [[Basel III]]
* [[Basel IV]]
* [[Beneficiary]]
* [[Bid bond]]
* [[Capital]]
* [[Capital adequacy]]
* [[Contingent liabilities]]
* [[Contingent risk]]
* [[Corporate]]
* [[Credit Conversion Factor]] (CCF or CF)
* [[Credit rating]]
* [[Guarantee]]
* [[Obligor]]
* [[Off balance sheet risk]]
* [[Performance guarantee]]
* [[Prudential Regulation Authority]]
* [[Retention bond]]
* [[Standard & Poor's]] (S&P)

===Other links===
[https://www.treasurers.org/hub/technical/trade-finance-update-february-2023 Potential rise in the cost of performance guarantees due to Basel 3.1 - ACT]

[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]
[[Category:Corporate_finance]]
[[Category:Investment]]
[[Category:Long_term_funding]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]
[[Category:Financial_products_and_markets]]
[[Category:Trade_finance]]