With Basel III proposals now under consultation, or implementation already underway, across all major jurisdictions, differences in scope, calibration and implementation timelines are becoming increasingly relevant for internationally active banks. While most of the EU framework has been live since 2025, following the CRR3 amendments to the CRR–CRD package. In the UK, the Bank of England issued its final Basel III rules in January 2026. The recent publication of the US proposals completes the Basel III implementation picture across the US, UK and EU.
On 19 March 2026, US banking regulators proposed a significant modernisation of the regulatory capital framework. The package revises the current standardised approach, replaces the so-called “Basel III Endgame” with an Expanded Risk-Based Approach (ERBA), and recalibrates the global systemically important bank (G-SIB) risk-based capital surcharge. It is designed to modernise capital calculations, improve risk sensitivity, and align US standards more closely with the final Basel III framework, while reflecting the realities of US markets and institutions.
The package forms part of a broader recalibration of the US regulatory capital framework. In parallel, the agencies are also revising the stress-testing framework to increase risk sensitivity and further recalibrate the G-SIB framework. Taken together, these measures signal a shift away from the post-crisis Dodd-Frank architecture towards a more risk-sensitive and more internationally aligned approach.
Compared with the 2023 Basel III “Endgame” proposal, the new package represents a more targeted implementation of Basel III. In particular, the mandatory application of the ERBA is limited to Category I and II banks, whereas the 2023 proposal also applied to Category III and IV institutions. This adjustment brings the US framework closer to the original intent of the Basel standards, namely their application to internationally active banks.
Against this backdrop, the analysis below compares the US proposals with the UK and EU Basel III frameworks, highlighting the key differences in design, scope and timing, and assessing the implications for internationally active banking groups, including the challenges of maintaining cross-border consistency as well as the opportunities for strategic recalibration.
For a deeper analysis of the US proposals, see our Forvis Mazars US RegCenter’s detailed insight on the new US package, An Overview of the Modernization of the US Regulatory Capital Framework, and the accompanying webinar.
"By reducing gold-plating, the US is moving closer to the Basel standard, and in some areas also to the UK and EU. However, complexities from domestic divergences remain, such as on the output floor, G-SIB surcharge, and market risk. For internationally active banks, a clear understanding of these global differences will be essential for strategic decisions that drive capital efficiency, booking models and competitive positioning.”
Eric Cloutier Partner - Global Head of Banking Regulations
The 2026 capital proposals mark a meaningful shift in the U.S. regulatory landscape — one that internationally active banking organisations cannot afford to approach passively. For G-SIBs and foreign banks with U.S. operations, the transition to a single, integrated risk-based framework brings both opportunity and complexity. Understanding how these changes interact with home-country requirements, cross-border capital planning, and competitive dynamics will be essential as the final rules take shape” Bobby Bean, Managing Director, Financial Services Risk & Regulatory Consulting, Forvis Mazars US
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"Although the US framework appears broadly aligned with Basel at a high level, the differences that remain relative to international implementations are significant and will prove challenging not only in terms of capital constraints but also operational efficiency for large international banks. In particular, the treatment of US intermediate holding companies (IHCs) is penalising for non-US banking groups, as it limits efficient capital allocation across the group. These effects are further compounded by differences in balance sheet structure, including the availability of netting, adding to the competitive pressure faced by non-US banks relative to their US peers.”
Sylvie Matherat
The US Basel III proposal represents a decisive revision of the capital framework, going beyond a narrow Basel transposition and opening important questions of scope, calibration and design. Although the US, UK and EU are formally moving towards a common global baseline, material differences remain in how that baseline is implemented. For international banks, those differences matter not only for headline capital effects, but also for the broader cross-border implications of the framework.
The sections below examine those differences in more detail, beginning with the aggregate capital impact of the reforms before turning to the main areas in which the US approach departs most clearly from the EU and UK frameworks.
Capital outcomes for large banks are set to diverge materially across the US, EU and UK, reflecting differences in scope, calibration and measurement. The US assessment captures the combined effect of several policy changes, while the EU and UK estimates focus more narrowly on the effect of Basel III implementation itself and hold other requirements constant. The capital impact assessments below are therefore directional rather than like-for-like comparisons.
In the US, official impact assessments indicate that the proposed package would reduce CET1 requirements by around 4.8% for Category I and II banks. This reflects a combination of a 3.8% reduction associated with the proposed recalibration of the G-SIB surcharge and a 2.4% decrease linked with the proposed stress test changes, offsetting the expected 1.4% increase connected with the Basel III NPR. These estimates capture shifts in binding capital requirements arising from the combined effect of multiple policy changes, rather than the standalone effect of Basel III finalisation.
Table 1: Cumulative Impact of Proposals on US Capital Requirements of Category I and II
Cumulative % change in Requirements | |||
| CET 1 | Tier I | ||
| Current Rule | Pre Nov 2025 Rules | ||
| Proposals | + Recent eSLR changes | -2.3% | |
| + this proposal (ERBA) | +1.4% | -0.7% | |
| + G-SIB surcharge | -2.4% | -3.9% | |
| + Proposed Stress Test changes | -4.8% | -6.0% | |
Source: Table VII.3, Federal Register, A Proposed Rule by the Comptroller of the Currency, the Federal Reserve System, and the Federal Deposit Insurance Corporation on 03/27/2026, https://www.federalregister.gov/documents/2026/03/27/2026-05959/regulatory-capital-rule-category-i-and-ii-banking-organizations-banking-organizations-with
By contrast, prudential authorities in other major jurisdictions, such as the UK and the EU, anticipate a net tightening.
In the UK, the PRA estimates that Tier 1 capital requirements for major banks will increase in aggregate by less than 1% by 1 January 2030, whereas in the EU, the EBA monitoring exercise indicates that, at full CRR3 implementation in 2030, reported CET1 ratios would fall by around 1% for large banks and by approximately 1.5% for G-SIIs relative to pre-reform levels. This decline is driven by higher RWAs under the Basel III framework, not by changes in CET1 capital requirements.
These differences in aggregate capital effects reflect not only differences in calibration, but also differences in the architecture of the framework itself.
A key point of divergence with the EU and the UK is that, while the US proposals simplify the capital framework through a single-stack approach, they do not include the Basel III output floor.
Under the current US framework, banks are required to calculate two separate sets of risk-based capital ratios: one under the US standardised approaches and one under the advanced approaches. The new proposals would eliminate this dual structure. Category I and II banking organisations would instead be subject to a single set of risk-based capital requirements, calculated under the Expanded Risk-Based Approach (ERBA), with the advanced approaches removed from the regulatory capital framework, except for market risk.
The ERBA revises the structure and calibration of risk-based capital requirements, with the objective of increasing risk sensitivity and reducing unwarranted variability across large banking organisations. In parallel, large firms remain subject to the stress capital buffer requirement, which provides a forward-looking overlay to capital requirements.
With the removal of the advanced approaches, the absence of the 72.5% output floor represents a departure from the Basel III standards and contrasts with the EU and UK frameworks. In practice, this difference is de facto non-binding for US firms, given the removal of model-based approaches (IRB and IMM) under the proposed framework. The output floor would not have materially constrained capital requirements for most US banking organisations. For cross-border groups, this may, however, change which entity becomes the binding capital constraint across US, EU and UK entities.
As a result, these differences in framework design may have practical consequences for internationally active banking groups, particularly in how capital constraints emerge across entities. Over time, this could affect internal capital planning, comparability across jurisdictions, and the way groups assess the relative capital intensity of their US and non-US operations.
The same pattern is visible across the main risk classes. Although the three jurisdictions remain broadly aligned to the Basel framework, targeted national choices still produce meaningful differences in treatment and, in some areas, in capital outcomes.
Credit risk is one of the most substantive components of the US proposal and illustrates clearly that, even where jurisdictions remain broadly aligned to Basel III in structure, differences in design can still produce different capital outcomes in practice. The revised US credit risk framework is more granular and more risk-sensitive than the current standardised approach, but it still does not rely on external ratings, unlike those in the UK and EU.
At the same time, much of the reform relates to the treatment of domestically oriented instruments and is therefore unlikely, in aggregate, to have a material effect on cross-border activities, notwithstanding some important exceptions discussed below. The US ERBA proposals are broadly aligned with Basel III, but they remove entirely the Internal Ratings-Based (IRB) approaches for traditional credit risk exposures as well as for securitised exposures under SEC-IRBA.
One important area of divergence is specialised lending. The US proposal does not introduce a standardised approach for specialised lending exposures, unlike the EU and UK. Project finance, object finance and commodity finance therefore, remain treated within the general corporate and business lending framework, without Basel-style supervisory slotting categories or dedicated risk-weight tables. This is a material departure, with direct implications for capital outcomes and competitive positioning.
Across jurisdictions, credit risk mitigation (CRM) remains formally aligned with Basel, but its practical effectiveness diverges more sharply. The EU framework is the most prescriptive and documentation-heavy, with CRM benefits increasingly capped by the output floor. The UK applies the most Basel-faithful and economically coherent CRM regime, relying more on supervisory judgement than on national deviations. The US proposal recognises CRM, but in a structurally conservative manner that limits its capital effect, particularly for complex or insurance-based mitigants.
The US proposal also introduces a significantly more granular treatment for mortgage loans, using LTV‑based risk weights in a manner consistent with Basel’s whole‑loan style approach. Yet it departs from the EU and UK by not applying a Basel‑style loan‑splitting approach for certain residential mortgages that are not materially dependent on cash flows generated by the property. As a result, the US framework adds granularity but diverges from the EU and UK in how it treats those exposures under the standardised approach.
Setting aside approaches relying on external ratings, the US is broadly aligned with Basel’s alternative approaches for institutions and non-financial corporates. The EU and UK must, however, first rely on external ratings-based approaches where the exposures are externally rated and apply enhanced due diligence requirements. Direct comparison is therefore not straightforward, as there is currently no mapping between grades for institutions (A, B or C) and corporates (investment / non-investment) and the respective credit quality steps.
The treatment of off-balance sheet, retail and equity exposures is broadly Basel-aligned across the three jurisdictions.
The US proposals also revise the treatment of mortgage servicing assets (MSAs) in a way that is intended to encourage bank-owned servicing businesses. Intangible assets stemming from MSAs would no longer be subject to threshold deduction but would instead receive a 250% risk weight. This simplification is intended to support banks’ traditional mortgage servicing role.
Here again, the UK occupies an intermediate position between the US and the EU. While it exhibits greater use of securitisation and third-party mortgage servicing than most EU jurisdictions, it has not developed a market for standalone mortgage servicing rights comparable to that of the US. Mortgage servicing in the UK remains closely linked to the originating lender or securitisation structure and is not treated as a distinct tradable asset for prudential purposes.
In the EU, by contrast, capital rules and consumer protection considerations continue to limit incentives for the emergence of a US-style non-bank mortgage servicing industry.
Credit risk, therefore, shows a broader feature of the comparison: formal Basel alignment remains important, but it does not eliminate national design choices that can still affect pricing, business mix and competitive positioning. A similar picture emerges in operational risk, albeit through a different policy choice.
The US, EU and UK are all moving to implement the Basel Committee’s revised operational risk framework by removing the Advanced Measurement Approach (AMA) and adopting the standardised approach based on the Business Indicator (BI).
While all three jurisdictions have formally converged on this framework, differences remain in how risk sensitivity is reflected in Pillar 1 capital requirements. In particular, the US is not implementing the Internal Loss Multiplier (ILM) in its operational risk framework. This effectively is equivalent to the current UK implementation, which has set the ILM equal to 1. It is even more aligned with the EU, which has also excluded the ILM from its operational risk model, therefore disregarding historical operational loss data for all institutions. However, the absence of ILM from the operational risk model in the US and the EU prevents any future adjustment of the ILM based on the observed loss data, while the UK retains the flexibility to revise its approach.
This difference in approach is also reflected in the calibration of the Business Indicator itself., The U.S. proposal includes targeted adjustments to the composition of the BI, recalibrating how certain non‑interest income streams are incorporated into the operational risk calculation.
The calibration is also different from Basel as it reduces the contribution of activities that typically generate significant fee income but involve limited balance sheet risk and historically low operational losses, including investment management, investment services and non-lending treasury services. The US approach also allows for more netting of applicable income and expenses, which may ultimately decrease the level of required capital compared to the EU or the UK frameworks that strictly follow Basel standards.
Comparable adjustments are not included in the EU or UK implementations, where supervisors have opted for a fully uniform Business Indicator and rely on supervisory review to address any residual misalignment between Pillar 1 capital and observed operational risk. In other words, lost data have no direct effect on Pillar 1 capital in the EU and UK, but remain subject to extensive reporting, validation and governance requirements.
In practice, this means that operational risk capital outcomes in the US are more directly shaped by firms’ historical low-loss experience in fee-based activities, whereas outcomes in the EU and UK are driven primarily by standardisation and supervisory discretion. Operational risk, therefore, remains an area where jurisdictional choices can produce different capital outcomes and different strategic incentives for internationally active banking groups.
That same combination of structural convergence and targeted divergence is also visible in CVA risk and counterparty credit risk, where the framework remains broadly Basel-aligned but selected national adjustments have potentially important consequences for certain business models.
Consistent with Basel, the advanced approach for CVA risk (A-CVA) is being removed in the US proposal, as it has already been in the EU and the UK. In addition, the US is not retaining the internal model method (IMM) for measuring counterparty credit risk (CCR) for derivatives and securities financing transactions (SFTs), which is a departure from the Basel standard. The standardised approach for counterparty credit risk (SA-CCR) will continue to apply to US exposures, whereas the UK and EU still permit banks to use EEPE (Effective Expected Positive Exposure) models under the IMM, even if only a limited number of banks currently benefit from it.
While there is general alignment at a structural level, the articulation between CCR measurement and CVA risk differs materially across jurisdictions, with important capital implications for certain business models.
The US proposal introduces a targeted SA-CCR modification allowing certain non-cleared repo-style transactions to be treated as forward-style derivatives for the purposes of cross-product netting with derivatives under a qualifying master netting agreement.
This would allow partial cross-product netting and could materially reduce EAD and RWAs for dealer and intermediation business models. However, the measure remains narrow, conditional and US-specific, with no equivalent under Basel or in the EU or UK.
The US CVA risk framework applies to Category I and II banks and to banks with more than USD 1 trillion in OTC derivatives. The proposal provides for the two new Basel methods for calculating CVA risk:
The choice between BA-CVA and SA-CVA is therefore a strategic one for banks. While BA-CVA is less operationally complex, it is also less risk-sensitive. SA-CVA, by contrast, improves risk sensitivity but requires more robust infrastructure and governance. For banks, it is one of the strategic decisions raised by Basel III implementation in the US, with direct implications for capital requirements.
The US also proposes a CVA exemption for client-facing derivative transactions, whereas the UK has recently stopped exempting CVA capital for corporate, pension fund and sovereign counterparties. The EU continues to exempt (with conditions) CVA capital for corporates, pensions, sovereigns, cleared trades and intra-group transactions. As a result, the US approach is more permissive than the UK on CVA exemptions, and contrasts with the EU’s continued use of targeted exemptions, provided these are monitored and reported to the supervisor.
Overall, while the structure of CVA metrics across the EU, US and UK is generally similar and follows the Basel standards, material gaps remain which could give rise to level playing field issues. These relate to:
These differences remain relatively technical, but they are not immaterial. In trading and client intermediation businesses, they can affect both capital efficiency and business structure. For internationally active banks, strategic implementation choices will define the material effect of the proposal. In addition to CVA, market risk will also require strategic decisions, particularly around scope and implementation under the revised market risk framework.
"The cross-netting benefit across some Securities Financing Transactions (SFTs) and derivatives introduced in SA-CCR by the US NPR may particularly benefit some desks trading non-eligible collateral under FCCM, like high yield bond repo desks. The new Basel aligned FCCM formula will also greatly reduce capital requirements for clients with large, long/short SFT portfolios, such as quantitative hedge funds. These measures will help US firms, to some extent, bridging the gap between the Basel standardized approaches and Internal Models Method (IMM).”
Nicolas Cerrajero Partner - Co-head of Quantitative Solutions UK
When it comes to market risk capital requirements, global banks are entering the final phase of the Basel III Fundamental Review of the Trading Book (FRTB). While the underlying Basel standards are common, material differences are emerging across jurisdictions, with important implications for trading businesses, capital planning and competitive positioning.
The central methodological change in the revised market risk framework across jurisdictions is the replacement of the VaR-based internal models capital measure with an expected shortfall (ES)-based measure. Under the US Basel III framework, market risk capital requirements would be calculated using one of the two following approaches:
In addition to the non-default capital requirements, the revised market risk framework would include a discrete default risk capital requirement to capture jump-to-default risk for credit-sensitive trading positions. This requirement is distinct from the sensitivity-based and expected shortfall components of the non-default framework.
The proposal also increases the trading threshold for market risk to USD 5 billion of gross trading assets and liabilities, or 10% of total assets. This is expected to result in a modest reduction in the number of banks in scope. Despite this threshold revision, derivatives-related capital requirements are not expected to fall overall, as the scope of CVA is likely to increase under the proposal.
The new internal models-based approach introduces the trading desk as the unit of application, replacing the existing whole-bank application, and requires banks to conduct and successfully pass both a back-testing requirement and a profit and loss attribution (PLAT) test. The consequences of failing these desk‑level tests are not expected to be binding, at least for the first three years, consistent with the EU approach.
For US banks with material trading operations, market risk remains one of the few areas where internal modelling capabilities can still deliver capital efficiency, even as the broader capital framework becomes more standardised. This is emphasised by the lack of an output floor in the US proposals. Internal models are expected to remain most relevant for banks with large and complex trading portfolios, including those with multi-asset exposures and more complex or non-linear products.
An important operational consideration is the mandatory calculation of the standardised approach on a weekly basis, including for banks intending to use internal models. This calculation remains non-binding for banks with approved models-based capital requirements, but it is intended to provide supervisors with a consistent and comparable measure of market risk across institutions.
In the UK, implementation of Basel 3.1 remains closely aligned with the Basel framework, including the full FRTB architecture for market risk. Internal models remain part of the regime in principle. However, the PRA has opted for a delayed implementation of the Internal Models Approach (IMA), pushing its effective use to January 2028. For 2027, UK banks will be able to rely on existing IMA permissions until the start of FRTB IMA in 2028, while any products that fall outside the scope of existing IMA permissions will have to apply the new standardised approach.
Under the EU’s CRR3, the Commission published in November 2025 its draft delegated act aimed at shielding EU banks from the full capital impact of FRTB from 2027. The draft introduces a temporary adjustment to FRTB own funds requirements through a framework-wide multiplier applied to total market risk capital requirements, intended to neutralise or cushion the increase in own funds requirements for banks adversely affected by FRTB. This measure is time-limited, for up to three years.
Market risk capital outcomes are therefore likely to diverge increasingly across regions. For trading-intensive banks, these differences will matter for capital efficiency, booking strategy and cross-border competitiveness.
While US banks will not be bound by the Basel output floor, banks that are eligible for the IMA are likely to enjoy a competitive advantage over European peers.
Taken together, these differences reinforce that, for trading businesses, Basel alignment at a headline level does not prevent materially different implementation outcomes. The same is true, in a different way, for the treatment of systemically important banks, where the US is moving closer to Basel but retains a distinct national framework.
"The US implementation of FRTB might be a genuine catalyst for the adoption of internal models for market risk. The evolution it introduces compared with the Basel text enables the internal model to be more attractive as the framework of non-modellable risk factors has been relaxed and there will be less constraints for the trading desks to be eligible to the internal model approach. As a result, many desks should benefit from internal models with capital requirements that are materially less punitive than under the standardised approach.”
Alexandre Poser
Since 2019, the Federal Reserve Board has observed that Method 2 scores have risen primarily because of nominal balance sheet growth, inflation and economic expansion rather than changes in a bank’s systemic risk profile. This drift has led to an increasing divergence between Method 1 and Method 2 and, in turn, reduced the framework’s risk sensitivity and predictability. As a result, most US G-SIBs are currently bound by the Method 2 score.
To address these issues, the FRB proposes a recalibration and several technical updates, namely:
Based on the proposals, Method 1 scores are expected to rise by around 6%, while Method 2 scores would fall by roughly 29%. This is expected to make Method 1 binding for two of the eight US G-SIBs. Overall, the changes move the US G-SIB framework closer to international standards and reduce discrepancies between US G-SIBs bound by Method 2 and non-US G-SIBs.
By contrast, both the EU and the UK continue broadly to follow the Basel Committee methodology. Divergence with the US approach will therefore remain, even if the proposed revisions narrow the gap.
The US proposal also anticipates ongoing Basel Committee discussions on indicator averaging. While the Committee consulted in 2024 on calculating scores based on average values over the reporting year rather than year-end values, it has not yet finalised any changes.
The US proposal explicitly incorporates averaging across selected indicators, signalling a clear policy preference and anticipating a possible evolution of the international standard. At the same time, the US approach is not a direct transposition of the Basel consultation, as the proposal differs in both the number and the type of indicators that are averaged. As a result, while it moves the US framework in the direction of the Basel discussion, it also introduces a distinct national design that may influence the Committee’s final calibration rather than simply implementing it.
Should the Basel Committee adopt an averaging methodology, European G-SIBs would need to strengthen data aggregation and reconciliation processes to move from year-end to monthly or weekly data. The move towards averaged indicators could also reduce the benefits of year-end balance sheet optimisation.
Overall, the proposed adjustments would reduce G-SIB surcharges for US banks, partly offsetting potential capital increases arising from Basel III implementation. For US G-SIBs, the proposal would reduce competitive disadvantages vis-à-vis peers in jurisdictions that more closely follow Basel’s G-SIB methodology.
This narrowing of the gap does not, however, eliminate broader asymmetries in how the US framework applies to internationally active banking groups. That remains particularly relevant for foreign banking organisations operating through the US intermediate holding company structure.
For foreign banking organisations (FBOs), applicability under the US proposals remains entity‑ and activity‑dependent.
Formally, the framework is nationality‑neutral: both US banks and FBOs are allocated to the Expanded Risk‑Based Approach (ERBA) or the revised Standardised Approach based solely on their US size, risk profile and activities. As a result, the US capital impact for an FBO depends on how its US footprint maps into covered entities and whether trading or derivatives activity triggers market risk and credit valuation adjustment (CVA) requirements.
Compared with the July 2023 US ‘Endgame’ package, the re-proposal significantly reduces the impact on FBOs by narrowing mandatory ERBA application largely to Category I and II firms, thereby reducing the number of foreign bank intermediate holding companies (IHCs) forced into advanced capital frameworks.
However, while the ERBA framework is intended to be broadly aligned with Basel standards, it incorporates numerous US‑specific calibrations and structural choices reflecting domestic market structure and statutory mandates. These deviations, while consistent with US regulatory objectives, introduce cross‑border implementation and interpretative challenges for global institutions that must reconcile ERBA outcomes with home‑jurisdiction Basel implementations and supervisory expectations.
In practice, despite nationality-neutral scoping, the effect for FBOs remains structurally different because the US entity is effectively isolated from its parent group The US rules apply at the level of the US IHC, without recognition of global group diversification, internal capital fungibility or home-jurisdiction model approvals. As a result, capital efficiencies realised at consolidated EU or UK group level under CRR3 or Basel 3.1 do not translate into lower US capital requirements.
In addition, FBO IHCs tend to operate business models more heavily weighted toward derivatives, capital markets and wholesale activities. This makes them more likely to trigger ERBA applicability and mandatory SA-CCR and CVA capital charges than similarly sized US commercial banks with more traditional lending‑focused business models that remain under the revised Standardised Approach and retain less risk-sensitive exposure methodologies.
Where FBOs may previously have treated US capital as largely localised, mandatory ERBA treatment for the largest and most internationally active banking organisations means that US capital outcomes now need to be incorporated into group‑wide capital planning and regulatory strategy. Even where ERBA application is elective, the decision carries strategic trade‑offs between reporting simplicity, capital alignment with home‑country frameworks and operational complexity.
In short, while US regulators can credibly argue that FBOs are not treated differently as a matter of law, the interaction of US scoping rules, activity-based thresholds, US-specific Basel deviations and the absence of cross-border capital recognition means that, in economic terms, FBOs continue to face higher relative capital constraints in the US than in their home jurisdictions, and often tighter constraints than comparable US peers.
"European banks are in a unique position globally: they are expected to operate under the most mature and codified Basel III framework, while remaining internationally competitive in a landscape of divergent national implementations. This reinforces supervisory credibility, but it also raises legitimate questions around level playing field, cross-border capital allocation and the long-term costs of regulatory fragmentation.”
David Labella Director – RegCentre – EU regulatory watch
As Basel III moves into implementation across jurisdictions, the key strategic question for internationally active banks is no longer only how the US, UK and EU frameworks compare at the headline level. It is where the remaining differences between them will matter most in practice, including for capital outcomes, business structure and competitive positioning.
That means focusing on the national design choices most likely to affect cross‑border capital efficiency. Differences such as in the output floor, market risk and G‑SIB frameworks may influence where activities are booked, how capital is allocated across legal entities and the relative attractiveness of different business lines. At the same time, firms will also need to implement capital management, data and infrastructure that are robust enough to operate across such diverging regimes.
Against that backdrop, while the core impact of the US proposals is expected to remain predominantly domestic, internationally active banks need to stay alert to the main cross‑border implications where national implementation continues to diverge.
The challenge ahead is therefore no longer simply to implement Basel III, but to identify early where those differences matter most and reflect them in capital planning, booking models and business decisions.
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