• EU delays Fundamental Review of the Trading Book to 2027
• Move follows global Basel III implementation slowdowns
• Aims to protect competitiveness of internationally active EU banks
• Builds on 2024 Banking Package implementation from January 2025
• Commission cites level playing field concerns in capital markets
• Previous one-year delay already moved deadline to January 2026
• Consultation responses supported further postponement
• Delegated act subject to parliamentary and Council scrutiny
• Delay allows monitoring of international regulatory developments
• Harmonised FRTB rollout seen as key to avoiding market distortions

The European Commission has extended the timeline for a major piece of Basel III banking reform, delaying the Fundamental Review of the Trading Book (FRTB) by an additional year to 1 January 2027.

The FRTB, the final component of the Basel III standards still pending in the EU, is designed to bring more sophisticated risk measurement techniques to capital markets activities. Its goal is to better align banks’ capital requirements with the actual risks they face in trading operations.

Most of the Basel III measures came into effect on 1 January 2025 under the EU’s 2024 Banking Package. However, the legislation allows the Commission to postpone or amend FRTB rules for a limited period through a delegated act.

The latest decision follows a previous one-year delay announced last year, which had already pushed implementation to 1 January 2026. That move was intended to match the pace of other major jurisdictions and maintain a global level playing field for EU banks.

Recent developments abroad have shown further slippage in Basel III timelines among leading economies. 

According to the Commission, these delays have kept concerns high over the competitive impact on internationally active EU banks. Responses to a public consultation and internal technical assessments supported a further postponement.

The Commission stressed that its aim remains the faithful adoption of Basel III while safeguarding EU banking resilience and global financial stability. It also reiterated its commitment to avoiding any disadvantage for EU banks competing against institutions from jurisdictions with slower Basel adoption.

The delegated act will now undergo scrutiny by the European Parliament and the Council for three months, with a possible three-month extension. 

The extra time will allow the Commission to continue monitoring international developments and refine its approach to the FRTB rollout.

Officials emphasised that maintaining competitive parity in global capital markets is central to the Savings and Investments Union strategy. 

They also noted that harmonising FRTB implementation across jurisdictions is critical to avoiding market distortions in trading activities.