EU Delays Basel III Trading Rules to 2027 as U.S. Deregulation Uncertainty Persists

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EU Delays Basel III Trading Rules to 2027 as U.S. Deregulation Uncertainty Persists

May 22, 2025 – Frankfurt — The European Union will postpone the implementation of the Basel III Fundamental Review of the Trading Book (FRTB) by another year, now targeting a go-live date of January 1, 2027, according to senior EU and national officials speaking with Reuters.

The decision comes amid rising uncertainty over U.S. financial regulation under President Trump’s administration. U.S. policymakers have yet to provide a definitive timeline for Basel III compliance and have indicated potential reversals of earlier post-crisis reforms. The EU’s delay follows Britain’s own postponement to 2027, leaving European institutions concerned about maintaining competitive parity with global peers.

The FRTB is a core component of the Basel III framework and governs how banks calculate capital requirements for trading activities, including standardized and internal model approaches to risk. Most of the Basel III package has already been adopted in the EU, in contrast to the U.S. and U.K., where implementation remains incomplete or paused.

A European Commission consultation in March gathered feedback from the banking sector on whether the FRTB should be delayed or adjusted. The European Banking Federation, representing EU-based banks with significant cross-border operations, supported the delay. Likewise, the International Swaps and Derivatives Association (ISDA) reported that “a clear majority” of its global membership favored postponement to avoid a dual-system burden.

European Commissioner Maria Luís Albuquerque formally informed EU finance ministers of the delay during a May 13 meeting. The ECB, which has previously advocated full and timely Basel III enforcement, proposed a phased compromise: delay internal model rules to 2027 and begin a staggered rollout of the standardized approach from 2026 through 2029.

Industry officials argue the delay is necessary to avoid unilateral regulatory exposure. As Commerzbank CEO Bettina Orlopp noted at a recent banking conference:

“It now looks as if this set of rules will not exist in the U.S., and we know that Brussels is looking at this carefully. We have to be careful that we maintain the international competitiveness of European banks.”

The divergence in timing highlights broader tensions in global financial regulation. President Emmanuel Macron has called for synchronization across major jurisdictions. Yet with the U.S. stalling and the U.K. opting out of near-term implementation, the EU finds itself at risk of regulatory overreach.

The FRTB delay underscores a broader recalibration of Europe’s post-crisis regulatory strategy as it waits for clarity from Washington. While the EU remains nominally committed to Basel III’s objectives, its tactical shift toward alignment with the U.S. and U.K. reflects mounting pressure from both political and market forces.

Source: Reuters, interviews with EU and national officials, industry group statements