The European Commission has announced a further one-year delay in implementing a critical component of the Basel III banking reforms, pushing the start date to January 1, 2027. The decision underscores growing concerns over regulatory alignment among major global financial centres.

The postponed regulation—known as the Fundamental Review of the Trading Book (FRTB)—is designed to overhaul how banks calculate capital requirements for market risk. It forms a cornerstone of the broader Basel III framework, which was introduced in the aftermath of the 2008 global financial crisis to reinforce banking system resilience.

Originally expected to take effect earlier, the EU had already delayed FRTB implementation once to 2026. However, continuing uncertainty around the United States’ regulatory trajectory has prompted another deferral. Sources previously told Reuters that the EU was awaiting more clarity on potential deregulatory moves by U.S. authorities before committing to the new timeline.

“Recent international developments have indicated further delays in the Basel III implementation by some major global jurisdictions,”
— European Commission, June 2025

The Commission noted that concerns remain elevated about maintaining an international level playing field, especially as other key financial hubs such as the United Kingdom and the United States have yet to enforce the rules. Without coordinated implementation, EU institutions risk being placed at a competitive disadvantage, particularly in capital-intensive trading activities.

The delay reflects broader geopolitical and regulatory frictions that continue to influence the pace and consistency of financial reform worldwide. It also raises questions about the future of global regulatory harmonisation, a priority long championed by the Basel Committee on Banking Supervision.

As the EU recalibrates its timeline, the banking industry is expected to continue lobbying for clarity and consistency across jurisdictions—highlighting the balancing act between strengthening financial stability and preserving competitive equity.