In 2013, KPMG predicted the emergence of ‘Basel 4’ even before Basel 3 had been fully implemented. Looking back, we see much of what we predicted has come to pass, and in some cases where international standards and national regulation have become more onerous for banks.
Despite what the standard setters may say, Basel 4 is real and it will increase capital requirements and funding costs, which will impact banks’ ability to lend and therefore hit the wider economy.
This page features a number of reports and articles from KPMG that have been forecasting the emergence of Basel 4.
It has been almost a decade since the start of the financial crisis, and the existing pipeline of regulation is still far from completion – that’s without even considering new rules that will emerge as business models change and technology evolves. Regulatory compliance dominates bank’s priorities; strategic thinking and innovation need to be at the forefront.
As Basel 4 has evolved, the strategic and business implications for banks we put forth in Basel 4 – Emerging from the mist have become even more pronounced. Banks have raised more capital and/or reduced their on- and off-balance sheet activities, which in turn has increased costs and reduced the availability of bank finance for lending, among other issues. The multiple regulatory and commercial pressures on banks are making it more difficult for banks to develop and implement viable and sustainable business strategies, and to meet the expectations of their customers, investors and regulators simultaneously.