US Basel III Endgame: Trading and Capital Markets Impact 2026 Update

In March 2026, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation published a new proposal for capital rules known as the US Basel III, based on the global minimum regulatory capital standards developed by the Basel Committee on Banking Supervision. These rules were first proposed in July 2023. ISDA considers the 2026 proposal a constructive step forward that recognizes the importance of appropriately calibrating the amount of capital required for capital markets and trading activities. Despite this progress, several aspects of the 2026 proposal would still produce outcomes that are not sufficiently aligned with economic risk. In advance of a final rule, ISDA recommends targeted changes to improve risk sensitivity while preserving the safety and resilience of the capital framework.

To objectively assess the 2026 proposal, ISDA conducted a quantitative impact study (QIS) with input from the eight US global systemically important banks. The QIS shows that the market risk portion of the framework, known as the Fundamental Review of the Trading Book, would increase market risk capital by approximately 89% under the standardized approach applied across the full portfolio, and by approximately 30% under a blend of internal models and standardized approach that reflects current model approvals. This matters because trading and capital markets activities are central to the ability of US businesses to raise funds and manage risk. Where capital requirements are not aligned with underlying risk, the cost of market intermediation, client hedging and financing rises, ultimately affecting end users, businesses and consumers.

This note summarizes the key findings of the ISDA QIS and the principal recommendations in ISDA’s comment letter to the agencies.

Click on the PDF to read the full report.

Documents (1) for US Basel III Endgame: Trading and Capital Markets Impact 2026 Update

ISDA Response on Hedge Accounting Guidance

On August 14, ISDA responded to an exposure draft from the Financial Accounting Standards Board (FASB). ISDA broadly supports the FASB’s proposed targeted improvements to hedge accounting, including allowing interest rate hedging of held-to-maturity (HTM) debt securities, recognizing all Secured...

Joint Response to EBA Consultation

On August 12, ISDA and the Association for Financial Markets in Europe (AFME) responded to the European Banking Authority’s discussion paper on certain taxonomy key performance indicators (KPIs) and other aspects of the Disclosures Delegated Act  under Article 8 of...

Response to JSCC on Clearing Fund Consolidation

On August 12, ISDA responded to the Japan Securities Clearing Corporation’s (JSCC) consultation on its proposal to consolidate clearing fund consumption, calculation and deposit segmentation across six clearing qualifications under the Financial Instruments and Exchange Act. ISDA members broadly support...

Response on CSDD Guidelines

On August 6, ISDA responded to the European Commission’s (EC) consultation on due diligence guidelines under the Corporate Sustainability Due Diligence Directive (CSDDD). While ISDA acknowledges that model contractual clauses can be a helpful resource for in-scope companies, there are...