Basel 3.1: Clarity for trading activity as UK finalises rules

On 12 December 2023, the Prudential Regulation Authority (PRA) published Policy Statement PS17/23 on its approach to the implementation of the Basel Committee on Banking Supervision (BCBS) reforms.

The objective of the Basel 3.1 reforms is to reduce unwarranted variability in risk weighted assets (RWAs) by reducing the use of internal models and improving the risk sensitivity of standardised approaches. The policy statement covers the final rules for market risk, credit valuation adjustment risk and operational risk. The implementation deadline is 1 July 2025 with a 4.5 year transitional which ends in January 2030.

Please download our Hot topic for a detailed analysis of the policy statement and its implications.