Basel 3.1

Welcome to the KPMG insights page for Basel 3.1.

Final rules have been agreed in most jurisdictions, including the EU and UK, and revised US proposals are under consideration. The UK and EU have both taken steps to level the playing field by introducing amendments to their market risk approaches.

Banks face a significant book of work and multiple challenges as they stand up or refresh their Basel programmes - ranging from gap analysis assessments against existing rules, to identifying and making necessary changes to operating models, to building new RWA calculators, sourcing data and submitting model applications. KPMG member firms are actively supporting banks across all aspects of their Basel implementations, leveraging our global expertise – reach out to your local contacts below to discuss.

Key dates

BCBS
EU
UK
US
ASPAC

Standards published 2017
Proposed implementation timeline from 1 January 2023 with phasing in of output floor to 1 January 2028

October 2021 - European Commission proposed amendments to Capital Requirements Regulation (CRR3)
June 2024 - final rules published in Official Journal of the EU
Implementation of most components from 1 January 2025 with phasing in of output floor to 1 January 2032 (and other transitional measures)
The market risk component (FRTB) was to be implemented from 1 June 2026
12 June 2025 – the Commission adopted a delegated act postponing the date of application by a further year to 1 January 2027
4 June 2026 – the Commission issued a Delegated Regulation introducing targeted, time-limited amendments to the EU implementation of the market risk capital framework (FRTB). The measures will be available to banks for three years from 1 January 2027.

January 2026 – Prudential Regulation Authority (PRA) published final Basel 3.1 Policy Statement, PS1/26
Implementation from 1 January 2027 with phasing in of output floor to 1 January 2030
Implementation of FRTB-IMA delayed by one year to 1 January 2028
19 June 2026 – PRA consultation (CP9/26) on targeted proposals to refine specific elements of the IMA, including the treatment of non‑modellable risk factors, the calibration and operation of key model performance tests, and the interaction between IMA and the standardised approach.

July 2023 – Notice of Proposed Rulemaking (NPR) – US Basel III Endgame proposals
September 2024 – confirmation of further “broad material changes” to proposals
March 2026 - updated proposals from the Federal Reserve Board (FRB), Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corporation (FDIC) to revise and “modernize” the capital framework for banking organizations of all sizes
The March 2026 proposals are intended to “better align regulatory capital with risk while maintaining the safety and soundness of the banking system
Implementation timeline to be confirmed

Implementation dates vary – typically from 2024 to 2025 with a 5-year phase-in for the output floor

How KPMG can help

Basel 3.1 is broad in scope and impact. KPMG has the credentials and expertise to support you in all aspects of your implementation including:

Carrying out gap assessments and implementation plans
Planning for and managing any increase in capital requirements
Upgrading data, systems and (internal and external) reporting
Applications to use internal model approaches (where these are still available)
Asset portfolio adjustments and balance sheet optimisation in response to changes in risk weightings
Assessing the revised capital standards in the context of all other regulatory reforms and market developments