On July 7, 2021, the Basel Committee on Banking Supervision released its interim report,  Early lessons from the Covid-19 pandemic on the Basel reforms, as part of “the Committee's broader work programme to evaluate its post-global financial crisis reforms”.  The report supports the argument that regulatory reforms in response to the financial crisis have “absorbed the shock” brought about by the COVID-19 pandemic. The report essentially touts the success of the Basel III reforms maintaining that without them and other support measures by public authorities, the banking system would have suffered from greater stress.

• “New report gives a preliminary assessment of the impact of implemented Basel reforms during the pandemic as part of a broader evaluation of their effectiveness.
• Higher quality capital and liquidity levels required by the reforms helped banks absorb the significant impact of Covid-19 shock.
• The banking system would have faced greater stress during this period had the reforms not been adopted and implemented.”

More information on the Basel Committee’s report is available here.