Basel III consultation: advanced approaches, systemic importance, the Net Stable Funding Ratio and the leverage ratio
We have published a consultation on the further implementation of Basel III. Submit your feedback on our proposals regarding:
- advanced approaches to credit risk and the output floor
- systemic importance and the systemic buffer
- the Net Stable Funding Ratio
- the leverage ratio
We have also provided an updated timeline for our roadmap in light of the UK’s delayed implementation of Basel III until 1 January 2027.
Summary of proposals
Advanced approaches and output floor
- will be based on relevant parts of the Prudential Regulation Authority’s (PRA’s) near-final rulebook
- use of advanced approaches will require our permission, both for general use and for each specific model
- output floor rules will apply, except for international subsidiaries already subject to floors under consolidated supervision
Systemic importance
- model proposed to identify highly systemic banks based on their provision of transactional accounts to Jersey individuals and small and medium-sized enterprises
- a threshold of 9,000 accounts is proposed to classify a bank as highly systemic
- a systemic buffer of 1.5% will apply to highly systemic Jersey incorporated banks (JIBs)
- international systemic classification by a home supervisor will also be recognised
- we may share systemic assessments with other supervisory and resolution authorities, but will not publish individual results
Net Stable Funding Ratio (NSFR) and leverage ratio
- leverage ratio requirements will apply only to systemic or internationally active JIBs
- we will adopt the Prudential Regulation Authority’s leverage ratio rules, including a minimum requirement of 3.25 % and carve-outs for central bank reserves
- we will implement the PRA’s NSFR rules for systemic or internationally active JIBs
Next steps
Submit your feedback to David Fisher by 30 September 2025.
Read the full consultation paper.