Understanding Basel III Endgame: What Treasury Teams Need to Know

Introduction: What is Basel III?

Basel III is a global regulatory framework designed to strengthen the stability and resilience of the banking system. Introduced by the Basel Committee on Banking Supervision in the wake of the 2008 financial crisis, its reforms aim to improve capital adequacy, limit excessive risk-taking, and increase liquidity buffers across large banks.

Basel III Origins and Timeline: 2008–2017

Basel III was born out of the 2008 financial crisis, when regulators realized that many banks lacked sufficient capital, consistent risk models, and reliable liquidity buffers. In response, the Basel Committee on Banking Supervision introduced a series of reforms aimed at strengthening global capital and liquidity standards and reducing systemic banking risk. Those reforms, finalized in 2019 globally, introduced:

• Standardized risk measures to reduce inconsistencies across banks

• Output floors to limit excessive reliance on internal risk models

• Stricter capital buffers to improve shock absorption

Basel III Implementation, Pushback, and Delays: 2023–Present

The U.S. initially targeted July 1, 2025, for implementation, with a three-year phase-in period. However, significant delays have emerged, primarily due to political and industry pushback and concerns over U.S. economic competitiveness.

While Europe has largely moved forward with adoption, U.S. regulators are still refining the proposed rules. Despite the delays, treasury teams shouldn’t be complacent. Leading treasury teams are already preparing by shoring up credit ratings, segmenting deposits, and reassessing liquidity strategies.

What Basel III Means for Banks

The Basel III Endgame significantly raises capital requirements for banks, particularly in areas like operational risk and non-operational deposits. Key changes include:

• Higher risk weightings for non-operational deposits and certain trading activities

• Enhanced capital buffers for all banks, not just those using advanced internal models

• An output floor that limits how low capital requirements can go, even for banks using internal modeling

Banks will need to hold more capital across the board, which can lead to increased costs and tighter margins. In turn, those costs may be passed on to clients in the form of lower yields or more selective deposit pricing.

What Basel III Means for Treasurers

For treasurers, Basel III introduces a new reality where credit ratings, relationship value, and data transparency all carry more weight. Key impacts include:

• Greater emphasis on investment-grade ratings, which can influence access to pricing, products, and credit allocation

• Bifurcation between investment-grade and non-investment-grade corporates, with stronger credits receiving preferential treatment

• Stricter scrutiny of leverage, making it more important for treasurers to present a bulletproof liquidity story to their banking partners

Treasurers must be ready to clearly articulate their balance sheet, ratings story, and full relationship value with each banking partner. 

How Treasurers Can Navigate Basel III

There are several proactive steps treasury teams can take to prepare:

• Secure or upgrade credit ratings to ensure favorable access to bank balance sheets

• Diversify funding sources beyond revolvers, including commercial paper, supply chain finance, and receivables finance

• Evaluate secured borrowing options as collateralized structures become more attractive

• Upgrade or implement modern treasury management systems to improve forecasting, visibility, and stress testing under Basel III assumptions

• Strengthen bank relationships by articulating total wallet value and understanding internal scoring under the new rules

• Explore off-balance sheet alternatives like money market funds, suite structures, and direct Treasury investments

These strategies can help reduce dependence on traditional deposit products while improving liquidity, flexibility, and pricing under the new regulatory environment. For more insights on how treasurers can effectively navigate Basel III reforms, this blog post from Kyriba’s John Stevens offers a concise summary of strategies treasurers can use to prepare and adapt.

Jiko’s off-balance sheet model enables treasurers to hold cash directly in U.S. Treasury bills while maintaining liquidity for payments and operational needs. Funds are held in the client’s name, fully reserved, and never pooled or exposed to balance sheet risk. This structure not only avoids Basel III capital requirements but also provides a secure, compliant, and modern alternative to traditional bank deposits. For treasurers looking to future-proof their strategy, Jiko represents a competitive and scalable alternative to allocate cash.

Key Takeaways

• Implementation in the U.S. remains uncertain

• Proposed reforms will significantly raise capital requirements for large banks

• Reforms will impact treasury teams’ deposit pricing and availability

• It’s not too early for treasurers to begin preparing for how to navigate reforms

Watch the Experts Discuss Basel III

The insights in this blog post are a summarized version of a recent webinar Jiko hosted with guest speakers from Kyriba and Goldman Sachs as part of Jiko’s Cash Confidence in a Shifting Landscape webinar series. The webinar originally aired on September 23rd, 2025, and is now available on demand. 

Speakers

Rachel Green

Senior Sales Executive, Jiko

Driven by a passion for empowering treasurers, Rachel is dedicated to helping businesses unlock safe strategies for optimizing corporate cash. With experience across financial advising, asset management, and fintech, she brings practical insight into secure, yield-focused investments, especially in today's volatile markets. Rachel is on a mission to make treasury a strategic force alongside the CFO and a true guardian of liquidity and value.

John Stevens

SVP, Global Head of Capital Markets, Financial Institutions, Working Capital & FX, Kyriba

John Stevens is a financial services executive with deep expertise in working capital, trade finance, and capital markets. He currently serves as SVP, Global Head of Capital Markets, Financial Institutions, Working Capital & FX at Kyriba, where he leads the company’s efforts across financial institutions, liquidity optimization, and bank partnerships worldwide. Prior to Kyriba, John spent six years at C2FO and 10+ years as a banker, where he led the origination business across the U.S., Canada, and Latin America. John brings sharp focus on execution and growth, helping some of the world’s largest enterprises and banks unlock trapped liquidity through innovative financial technology.

John Patterson III

Vice President, Capital Analysis & Planning - Derivatives Calculation Team Lead, Goldman Sachs

John Patterson III is a Vice President at Goldman Sachs within the Capital Analysis, Planning, and Reporting team. He leads the Derivatives calculation team responsible for calculating Risk-Weighted Assets (RWA), Supplemental Leverage, GSIB surcharge, and CCAR forecast for the firm’s entire OTC derivatives portfolio. In this capacity, he partners across Divisions to strengthen risk management, guide strategic capital decisions, and ensure the firm is well-positioned for changes in the macroeconomic environment and regulatory shifts.