CRR III – here we go!

The finalisation of the new capital requirements (Basel III / CRR III) is imminent, with far-reaching changes for all banks, regardless of size, business model or chosen credit risk approach.

In this context, an international survey was conducted in mid-2022 as part of a cooperation between Deloitte and RSU to examine the drivers of these changes in capital requirements and the status of preparations in the banking market in more detail. The feedback from the 52 participating institutions from Europe and the Asia-Pacific region was processed in the “CRR III Survey 2023”.

With regard to credit risk, the output floor (72.5% of RWA in the SA-CR) and the newly gained flexibility in the IRBA approval of only individual exposure classes and thus the elimination of the so-called IRBA coverage ratio are the most significant changes. The hurdles for the IRBA have thus been lowered significantly, and IRBA approval is conceivable for many banks in the future. As the results of the survey confirm, the use of rating models based on the pool approach also play an important and positive role in the decision-making process.