The Future of Capital Requirements: The Road to Basel IV

On December 7, 2017, the Basel Committee on Banking Supervision (the “Basel Committee”) announced that it had finalized all outstanding reforms under its Basel III framework (the “2017 Reforms”). Often referred to as “Basel IV” due to their capital implications, the 2017 Reforms are a central element of the Basel Committee’s response to the financial crisis and complement the initial phase of the Basel III reforms to the global regulatory framework announced in 2010. The 2017 Reforms are focused primarily on calibrating the capital adequacy (as opposed to the liquidity) components of the Basel III framework to enhance their comparability across banks and across jurisdictions.