Basel III: Adapting to Regulatory Divergence and Competitive Threats

Basel III implementation continues to fracture across jurisdictions, creating competitive challenges for globally active banks. This panel brought together regulators and industry leaders to confront the reality of divergent national rules and their implications for international banking.

Speakers acknowledged ongoing efforts to monitor and align regulatory approaches, but were candid about the complexities involved. Different jurisdictions face varying economic priorities, political pressures, and legacy system constraints that shape how Basel standards get translated into national law. This creates an uneven playing field where banks face different capital requirements depending on where they operate.

The discussion explored the fundamental tension between regulatory simplicity and financial system resilience. While streamlined rules would ease compliance burdens, they might sacrifice the nuanced safeguards needed to prevent future crises. Practical constraints around procurement cycles and legacy technology infrastructure further complicate implementation timelines.

Rather than offering easy solutions, the panel provided a realistic assessment of the regulatory landscape's evolution. Speakers emphasised that progress requires coordinated action among international bodies, national regulators, and financial institutions. Pragmatic adaptation—acknowledging constraints while working toward greater alignment—emerged as the most viable path forward.

The session underscored that Basel III's ultimate success depends not on perfect harmonisation but on effective communication and mutual understanding across borders.

Panellists:

• Neil Esho, Secretary General, Basel Committee on Banking Supervision
• William ‘Bill’ Coen, Former Secretary General, Basel Committee on Banking Supervision, Suade Advisory Board
• Gonzalo Gasós, Senior Director, Prudential Policy and Supervision, European Banking Federation