Basel IV: Implications for ALM

How Capital Finalization Reshapes Balance-Sheet Strategy

Banking regulation has entered a new phase. With the finalization of Basel III (Basel IV), supervisors are no longer introducing new rules,  they are refining and tightening existing frameworks to ensure capital requirements better reflect risk.

While Basel IV does not directly regulate Asset–Liability Management, it reshapes capital requirements and risk-weighted assets, fundamentally impacting portfolio strategy, funding decisions, pricing, and growth.

Measures such as the output floor and revised market-risk standards are making capital a binding constraint for many banks. This creates a forcing event: business models, product mix, and balance sheet strategies must adapt to remain competitive and compliant.

Over time, these shifts demand more forward-looking balance sheet projections and tighter integration across ALM, Treasury, and Capital Planning.

Mirai RiskTech_Whitepaper - Basel IV: Implications for ALM

What This Whitepaper Explores

Drawing directly from expert insight, this publication translates Basel IV from a regulatory concept into its practical consequences for balance-sheet strategy and the evolving role of ALM.

Inside, you will learn: 

  • Why Basel IV is better understood as the final stage of Basel III

  • How RWA changes and the output floor affect lending and portfolio mix

  • How FRTB influences trading portfolios and hedging strategies

  • How changes in capital requirements shape balance-sheet projections and planning

  • The growing importance of data, governance, and integrated ALM frameworks 

Who Should Read This Whitepaper

This whitepaper is designed for:

 ALCO members and senior management

 Treasury and ALM professionals

 Risk and finance teams

 Banking regulators and supervisors 

Anyone involved in balance-sheet strategy will find a clear and practical perspective on how Basel IV reshapes the operating environment. 

The Author's Perspective

 

Ignacio Campillo

"Basel IV does not change ALM regulation itself, but it changes capital requirements in a way that reshapes the balance sheet. As capital charges increase, certain activities become less attractive, and the bank is forced to rebalance its balance sheet. ALM then has to manage interest-rate and liquidity risk on that new structure.”

Ignacio Campillo

Head of Professional Services at Mirai RiskTech
Eoghan OGriobhtha

“Most ALM applications require highly aggregated data. Aggregation strips away some context. Taken in isolation this can be perfectly fine. Where you wish to have a holistic view, for instance for balance sheet optimization, the result will usually require aggregated outputs loaded to spreadsheets.”

Eoghan OGriobhtha

Managing Director UKI at Mirai
Download the Whitepaper