Of course. Here is a detailed timeline of the Basel IV reforms, including key implementation dates and the current status.

Executive Summary: What is "Basel IV"?

"Basel IV" is the unofficial name for a comprehensive set of banking regulations issued by the Basel Committee on Banking Supervision (BCBS). It is not a separate framework but rather the finalization of the Basel III post-crisis reforms. Its main goals are to:

• Restore credibility in risk-weighted assets (RWAs): Reduce variability in how banks calculate their capital requirements.


• Enhance the resilience of banks: Ensure they hold sufficient capital to absorb losses during periods of stress.


• Level the playing field: Create more consistency in regulatory capital outcomes across banks and jurisdictions.

The Official Timeline: Key Dates and Milestones

The following timeline outlines the major milestones from the initial agreement to the current implementation phase.

timeline
    title Basel IV Implementation Timeline
    section Finalization & Agreement
    2017 : Final Standards Published<br>(Dec 2017)
    section Initial Implementation Timeline
    2022 : Original Start Date<br>(1 Jan 2022)
    2023 : Original Full<br>Implementation (1 Jan 2023)
    section Revised Timeline (COVID Impact)
    2023 : Revised Start Date<br>(1 Jan 2023)
    2028 : Revised Full<br>Implementation (1 Jan 2028)
    section Current Status
    2024-Present : Phased Implementation<br>in Progress

Key Deadlines for Implementation

The most important deadlines for the phased implementation are:

Detailed Breakdown of the Reforms and Their Phase-In

The Basel IV package consists of several interconnected pillars. Here’s how they are being implemented:

1. Output Floor

• Phase-in Period: The floor is being phased in over five years to allow banks time to adjust.


• 2023: 50% of the floor


• 2024: 55%


• 2025: 60%


• 2026: 65%


• 2027: 70%


• 2028: 72.5% (fully implemented)

2. Revised Standardised Approaches

• Credit Risk: New, more granular risk weights for exposures like banks, corporates, and real estate. It removes reliance on external credit ratings in some areas.


• Operational Risk: Replaces older methods with a single, standardized approach (the "Business Indicator Multiplier") based on a bank's income and historical losses.


• Credit Valuation Adjustment (CVA) Risk: Revisions to the framework for capturing the risk of counterparty default.

3. Constraints on Internal Models

• Credit Risk: Banks can no longer use internal models for certain asset classes (e.g., large corporates, financial institutions), forcing them to use the standardized approach.


• Market Risk: The "Fundamental Review of the Trading Book (FRTB)" introduces a new, more rigorous internal models approach and a revised standardized approach.

Jurisdictional Variations: The US and EU

While the BCBS sets global standards, each jurisdiction implements them in its own way and on its own schedule.

• United States: The US banking agencies have proposed their version of the rules, often referred to as the "Basel III Endgame". The US proposal is generally more stringent and applies to a wider range of banks than the BCBS standard. The final rule is expected in 2024, with a multi-year implementation period likely to follow.


• European Union: The EU has already implemented the bulk of the reforms through its "Capital Requirements Regulation (CRR) III" and "Capital Requirements Directive (CRD) VI" package. The implementation date for most of these rules in the EU is January 1, 2025, with some elements having a later start.

Summary

• Basel IV is the finalization of the Basel III reforms.


• The global implementation began on January 1, 2023.


• The key Output Floor is being phased in until it reaches 72.5% on January 1, 2028.


• Timelines differ by region (e.g., EU in 2025, US timeline TBD), so it's crucial to check the specific rules for a given jurisdiction.