the Saudi Central Bank “SAMA” announced the official implementation of the latest Basel III reforms in local banks at the beginning of this month.

It explained that the Basel (3) aim to increase confidence in the methodology for calculating risk-weighted assets by improving the sensitivity of the standard approach used in their calculation, reducing reliance on the internal models approach, and strengthening risk-based capital.

the Central Bank noted that, in line with these reforms, it has worked to update the framework of prudential regulations related to capital risks in local banks, with a view to fulfilling the Kingdom’s obligations as a member of the G20, and to further its efforts to position the Kingdom as a leader in the implementation of international standards.

During the second half of last year, the Central Bank also conducted a pilot implementation of these reforms with the participation of all local banks. Preliminary results indicated that the banking sector is ready for official implementation, while continuing to maintain stable capital levels.