Open Letter signed by the FMA and 24 other European supervisory authorities and national banks regarding the implementation of the Basel III framework

The European Commission is currently preparing a legislative proposal for implementing the last parts of the Basel III framework for banking regulation that was agreed globally in response to the global financial crisis of 2007 to 2010. In this context, 25 high-ranking representatives from banking supervision authorities and central banks in Europe, including Helmut Ettl, Executive Director of the Austrian Financial Market Authority, and Robert Holzmann, the Governor of the Oesterreichische Nationalbank, have addressed a joint open letter to the European Commission’s representatives for this legislative proposal, Commissioner Mairead McGuinness and Director General John Berrigan.

In their letter, the supervisors and central bankers explicitly urge that all aspects of the Basel III framework should be implemented fully, promptly and consistently in the EU. They speak in favour of implementing the globally agreed framework in accordance with both the wording as well as its intention, and therefore also explicitly any dilution, since, as demonstrated during the pandemic, more resilient banks are able to support the real economy significantly better, even in times of crisis.

This appeal specifically relates to three areas: (i) a simple and transparent implementation of the output floor for internal models, taking into account all capital requirements that are applicable in the EU, (ii) a fully Basel III-compliant implementation of the new, more risk-sensitive credit risk standard approach and (iii) to as far as possible dispense with EU-specific deviations from the globally agreed Basel III framework.