BCB says banking regulation is ahead of Basel III curve

Thursday, February 17, 2011

Brazilian central bank BCB has published its official guidelines on Basel III implementation, pointing to the country's banking regulation as being ahead of the international benchmarks on most points.

"Currently, Brazilian prudential regulation is more conservative that the international standard," a press release from the central bank read. "This puts Brazilian banks in a more comfortable position than most of their peers."

For this reason, BCB said that the implementation timeline should be faster in Brazil than in other countries, with local capital requirements already higher than those in other countries, and that other steps to ensure that banks can absorb losses will be increased gradually to meet the Basel III guidelines.

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The plan would have BCB implement its first changes starting July 1, 2012, rather than January 1, 2014, as is planned in other countries, while the second phase of building in countercyclical capital requirements should start on January 1, 2014, in Brazil. It is scheduled to start in January 2016, according to the Basel III guidelines.

To read the full BCB guidelines on Basel III in Portuguese, go to this link