Basel III
Also called basel 3.1, basel III endgame, CRR3
Basel III is the global set of bank capital, leverage and liquidity standards agreed by the Basel Committee after the 2008 crisis. Its final reforms, agreed in 2017, change how banks calculate risk-weighted assets and add an output floor. Each jurisdiction implements them through its own rules and on its own timetable.
How it works
Basel III requires banks to hold minimum capital against risk-weighted assets, meet a leverage ratio and keep liquidity buffers. The final reforms revise the standardised and internal model approaches for credit, market and operational risk. The output floor limits how far internal models can cut capital, eventually to 72.5% of the standardised result. Banks rebuild calculation engines and regulatory returns to apply the new rules.
Implementation now differs by region. The EU applied most of the package through CRR3 from 1 January 2025, with market risk rules from 2027. The UK applies Basel 3.1 from 1 January 2027, with market risk internal models from 2028. The US re-proposed its version in March 2026 and has not finalised it. Global banks plan for three timetables.
The rules
Revises risk-weighted asset calculations for credit, CVA and operational risk and sets an output floor rising to 72.5% of standardised risk-weighted assets.
Internationally active banksApplies the Basel III final reforms in the EU, with the market risk framework from 1 January 2027 and transitional output floor arrangements.
EU credit institutions and investment firms under CRRApplies Basel 3.1 from 1 January 2027, with the market risk internal model approach delayed to 1 January 2028.
PRA-regulated banks, building societies and designated investment firmsProposes revised capital requirements for credit, market, operational and CVA risk; comment period closed 18 June 2026.
Category I and II US banking organisationsCommon questions
When does Basel 3.1 apply in the UK?
The PRA published final rules in PS1/26 on 20 January 2026. They apply from 1 January 2027. The internal model approach for market risk applies from 1 January 2028, and firms may use the standardised approach for their whole trading book from 2027.
Has the EU implemented Basel III?
Yes. CRR3 applied from 1 January 2025 for most of the final reforms. The market risk framework was postponed twice and applies from 1 January 2027. In June 2026 the Commission adopted a delegated act giving temporary market risk relief for three years.
Where does the US stand on Basel III endgame?
The 2023 proposal was withdrawn in favour of a new package. The Federal Reserve, FDIC and OCC proposed revised rules on 19 March 2026, and the comment period closed on 18 June 2026.
What is the output floor?
The output floor stops banks using internal models from reporting risk-weighted assets below a set percentage of the standardised approach result. Under the Basel standard the floor is 72.5%, phased in over several years in each jurisdiction.
