Washington, D.C., December 7, 2017 - The Institute of International Finance today released the following statement from President and CEO Tim Adams after the Group of Governors and Heads of Supervision announced a final agreement on the Basel capital standards.

"The finalization of the Basel III standards will provide additional regulatory certainty for the global industry. Given that much has changed since the initial Basel quantitative impact study regarding the design and calibration of the standards, there is still need for additional comprehensive and rigorous impact assessment of the finalized package and examination as to whether it has preserved adequate risk sensitivity in regulatory capital.' Such study, based on fresh data, should examine the effects of this agreement on capital levels, on the ability of the banking industry to adequately measure and price risk and whether the final framework is in line with the G20 mandate to not significantly increase capital requirements while maintaining a level playing field.

"We also underscore the need for opportunities to make the necessary adjustments to the new credit and operational risk frameworks to ensure unintended consequences are addressed ahead of the implementation deadline.' In this regard, the industry had expected that a review clause be included in the final package, providing the opportunity for a review within a few years of the calibration based on a fresh assessment of impact and a revision, if warranted, of the provisions adopted today, along the lines of what was decided on the leverage ratio. While we are disappointed that was not the case, we remain hopeful of a future meaningful examination of impact and the willingness of the BCBS to make adjustments should they be warranted by fresh new data.'  The IIF stands ready to contribute to this process of assessment of impact and determination of adjustments as part of a transparent dialogue with the industry and other stakeholders.'

"Finally, we reiterate the importance of international regulatory standards and emphasize the importance of harmonized and coordinated implementation of Basel III standards across all jurisdictions, including already-agreed components such as the Fundamental Review of the Trading Book and Net Stable Funding Ratio. We welcome the BCBS's commitment to undertake some key revisions to FRTB and its calibration, and we hope this will enable international consistency in its final implementation."

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The Institute of International Finance is the global association for the financial industry, with close to 500 members from 70 countries. Its mission is to support the financial industry in the prudent management of risks; to develop sound industry practices; and to advocate for regulatory, financial and economic policies that are in the broad interests of its members and foster global financial stability and sustainable economic growth. Within its membership IIF counts commercial and investment banks, asset managers, insurance companies, sovereign wealth funds, hedge funds, central banks and development banks.'