Arxo Findings Register · Arxo Law

ARXO-2026-0382 · Reported

Basel Framework: LEV30.3 second example

LEV30.3 cites CAP10.19 for the IRB provisions-shortfall deduction from CET1, but CAP10.19 covers the opposite case (excess provisions in Tier 2); the deduction is in CAP30.13.

Consequence

Position: IRB bank, EL 100, eligible provisions 70, shortfall 30 Reading a: follow CAP10.19 literally: no shortfall deduction found there, so no 30 'deducted from CET1' basis for LEV30.3 -> exposure measure not reduced by 30 Reading b: read as CAP30.13: 30 deducted from CET1, so 30 may be deducted from exposure measure Difference: exposure measure differs by 30

Proposed correction

Clarify or correct the cited passage so that the rule and its references give one result for the stated case.

Issued by
Basel Committee on Banking Supervision
Act
Basel Framework LEV30 (in force 2023-01-01, published 2020-03-27)
Place
LEV30.3 second example
Record
Discrepancy
Class
Text of the act
Where it arose
The text of the act
Arxo's conclusion
Confirmed
Official text
Unchanged at last check
Last checked
2026-10-31

Evidence

Contradiction within the text. Quotations are verbatim from the official material; translations are ours and marked.

CAP10.19 requires any shortfall in the stock of eligible provisions relative to expected loss amounts to be deducted from CET1 capital.
Normative text · Basel Framework LEV30 (in force 2023-01-01, published 2020-03-27) · LEV30.3 second example · Published 2020-03-27 · retrieved 2026-10-31 · SHA-256 5e23fb4d5fa879107b86abc132543ed73ca8818845c245cf34fc2f1663f708d8 · copy
Where the total expected loss amount exceeds total eligible provisions, banks must deduct the difference from Common Equity Tier 1.
Normative text · Basel Framework CAP30 (in force 2019-12-15, published 2019-12-15) · CAP30.13 · Published 2019-12-15 · retrieved 2026-10-31 · SHA-256 ab96c0ecb89252e77768ab38fb4c7ffe7f84dc216571074674dde92e8afc7b4d · copy

How to check it without Arxo's tools

  1. Open Basel Framework LEV30 (in force 2023-01-01, published 2020-03-27) and find LEV30.3 second example. Compare the text with the quotation above. A copy is kept in this register: 5e23fb4d5fa87910-LEV30@2023-01-01~2020-03-27.txt (SHA-256 5e23fb4d5fa879107b86abc132543ed73ca8818845c245cf34fc2f1663f708d8, copy of the official file).
  2. Open Basel Framework CAP30 (in force 2019-12-15, published 2019-12-15) and find CAP30.13. Compare the text with the quotation above. A copy is kept in this register: ab96c0ecb89252e7-CAP30@2019-12-15~2019-12-15.txt (SHA-256 ab96c0ecb89252e77768ab38fb4c7ffe7f84dc216571074674dde92e8afc7b4d, copy of the official file).
  3. The finding holds if the quoted passages read as shown and the comparison gives the result stated at the top of this page. If it does not, write to us with the record ID.

How this finding was made

AI models read the texts, built the examples and reviewed the findings.

Responsible institutions

Reported to

DateInstitutionChannelReference
2026-10-31Basel Committee on Banking Supervisione-mailhttps://mail.google.com/mail/u/0/#sent/KtbxLthRTjRNkqRtWGvxMWmXhVdckfWkGV

Responses

No response recorded.

History

  1. 2026-10-31Confirmed by Arxo
  2. 2026-10-31Entered in the register
  3. 2026-10-31Reported to Basel Committee on Banking Supervision (e-mail)

Cite this record

Arxo Law, Arxo Findings Register, ARXO-2026-0382, https://arxo.io/findings/ARXO-2026-0382/ (status as of 2026-10-31). Data: ARXO-2026-0382.json.