This study provides a comprehensive evaluation of the Basel III Finalization reforms and their implications for global banking stability through a rigorous PRISMA-based systematic review of the post-2017 literature. Although these reforms were designed to fortify capital adequacy, constrain excessive variability in risk-weighted assets (RWAs), and enhance supervisory consistency, empirical evidence regarding their real-world impact remains fragmented across jurisdictions. Employing a transparent screening protocol across the Web of Science and Scopus databases, this research identifies and synthesizes 52 core studies published between 2017 and 2026. The review is structured around six core reform pillars: the credit risk standardized approach, internal ratings-based (IRB) constraints, the output floor, the operational risk framework, the leverage ratio, and credit valuation adjustment (CVA). The synthesis reveals three overarching thematic findings. First, while heightened capital requirements unequivocally improve systemic resilience, they generate significant structural trade-offs by constraining aggregate credit supply, particularly for SMEs and unrated borrowers. Second, regulatory outcomes exhibit profound cross-jurisdictional heterogeneity, largely driven by asymmetrical exposures to output floor calibrations and IRB model restrictions. Third, the dynamic interaction between risk-insensitive leverage constraints and risk-weighted capital measures continues to create unintended asset allocation distortions. By moving beyond descriptive surveys, this study contributes an integrated, cross-jurisdictional assessment of regulatory effectiveness, implementation frictions, and remaining research gaps. The findings offer critical actionable insights for policymakers and regulators seeking to optimally balance financial stability, credit intermediation, and supervisory efficiency in the final implementation phase of the Basel III framework.
Hsu et al. (Tue,) studied this question.