What is the primary objective of **FISMA**?

**FISMA's primary objective is to provide a comprehensive framework for federal agencies to develop, document, implement, and maintain risk-based information security programs protecting federal information and systems.** Enacted in 2002 and modernized in 2014, it mandates protections commensurate with risk to confidentiality, integrity, and availability, using NIST's Risk Management Framework (RMF) with its 7 steps: Prepare, Categorize, Select, Implement, Assess, Authorize, and Monitor.

Who is legally or professionally required to comply with **FISMA**?

**FISMA requires compliance from all federal executive branch civilian agencies and contractors operating or processing federal information systems.** This includes federal agencies, third-party providers like cloud service providers via FedRAMP, and state/local entities administering federal programs; national security systems are excluded and follow separate frameworks.

Does **FISMA** require an external audit or third-party certification?

**FISMA requires independent annual evaluations by agency Inspectors General (IGs) or external auditors, but does not mandate third-party certification.** IGs assess program maturity using CISA metrics across NIST Cybersecurity Framework functions, producing reports submitted via CyberScope; contractors face agency-driven assessments, not standalone certification.

How often should an assessment for **FISMA** be performed?

**FISMA mandates annual independent evaluations by Inspectors General alongside continuous monitoring of controls.** Agencies conduct ongoing assessments per NIST SP 800-137, with system-level reviews tied to risk, Authorizing Official decisions, and events like significant changes; IG reports are due by July 31 annually.

What are the consequences of non-compliance with **FISMA**?

**Non-compliance with FISMA results in unfavorable IG reports, OMB remediation directives, reduced funding, contract loss, and debarment for contractors.** Agencies face operational constraints, public exposure, and Congressional scrutiny; contractors risk termination and exclusion from federal opportunities, with no direct fines but severe mission and financial impacts.

Can **FISMA** be mapped to other international frameworks?

**FISMA does not officially map to other international frameworks in its statutory requirements.** It relies exclusively on U.S. federal standards like NIST SP 800-53 and RMF; while NIST controls share conceptual alignments, FISMA implementation is standalone for federal systems without formal mappings.

What is the first step to begin implementing **FISMA**?

**The first step to implement FISMA is the Prepare phase of the NIST RMF, establishing governance, roles, and a complete system inventory.** Develop a risk management strategy, assign responsibilities to CIO, CISO, and Authorizing Officials, and create an authoritative asset inventory via Configuration Management Database (CMDB) to define the security program scope.

What is the primary objective of **Basel III**?

**The primary objective of Basel III is to strengthen bank resilience by raising the quality, quantity, and loss-absorbing capacity of regulatory capital while addressing leverage and liquidity vulnerabilities exposed by the 2007–2009 financial crisis.** It introduces minimum **CET1/RWA ≥ 4.5%**, **Tier 1/RWA ≥ 6%**, **total capital/RWA ≥ 8%**, plus a **2.5% CET1 capital conservation buffer**, a **3% leverage ratio**, **LCR ≥ 100%** for 30-day stress, and **NSFR ≥ 100%** for one-year funding stability, reducing reliance on risk-weighted assets via output floors and standardized disclosures.

Who is legally or professionally required to comply with **Basel III**?

**Basel III applies as a minimum standard to internationally active banks and large banking groups, with national supervisors implementing it domestically for other institutions.** The BCBS targets banks conducting cross-border activities, including G-SIBs and D-SIBs facing additional CET1 surcharges; jurisdictions extend it to domestic banks via local rules, such as U.S. enhanced leverage ratios (5–6% for large banks).

Does **Basel III** require an external audit or third-party certification?

**Basel III does not mandate external audits or third-party certification but requires banks to maintain internal processes subject to supervisory review under Pillar 2 and public disclosures under Pillar 3.** Supervisors assess ICAAP, stress testing, and RWA calculations, with RCAP ensuring jurisdictional consistency; Pillar 3 templates (e.g., KM1, LR1, CDC) enforce market discipline through standardized reporting.

How often should an assessment for **Basel III** be performed?

**Basel III assessments, including ICAAP and stress testing, must be performed continuously with formal reviews at least annually, aligned with supervisory reporting cycles.** Pillar 3 disclosures occur quarterly for key metrics (e.g., CET1, leverage, LCR/NSFR), with ongoing monitoring of buffers, RWA density, and liquidity to trigger distribution constraints or Pillar 2 add-ons.

What are the consequences of non-compliance with **Basel III**?

**Non-compliance with Basel III triggers supervisory actions including capital add-ons, dividend restrictions, fines, asset growth caps, and potential resolution intervention.** Buffer breaches activate automatic payout constraints (dividends, buybacks, AT1 coupons); national regulators impose enforcement like U.S. fines (e.g., Citigroup $136M for data deficiencies) or market access limits.

Can **Basel III** be mapped to other international frameworks?

**Yes, Basel III can be mapped to other international frameworks through shared prudential elements like capital and liquidity standards, though specifics vary by jurisdiction.** Its three-pillar structure (capital requirements, supervisory review, disclosures) aligns with common global banking supervision models, facilitating cross-border consistency via BCBS RCAP assessments.

What is the first step to begin implementing **Basel III**?

**The first step to implement Basel III is to establish executive-sponsored governance, including a steering committee and Regulatory Traceability Matrix mapping requirements to systems and processes.** Conduct a baseline gap analysis quantifying CET1, leverage, LCR/NSFR impacts via QIS, prioritizing data lineage and parallel RWA calculations.

FISMA vs Basel III

Standards Comparison

FISMA

Mandatory

2014

U.S. federal law mandating risk-based cybersecurity programs

Basel III

Mandatory

2010

Global framework for bank capital, leverage, and liquidity standards

Quick Verdict

FISMA mandates cybersecurity for US federal agencies and contractors via NIST RMF, ensuring data protection. Basel III sets global bank capital, leverage, and liquidity standards for financial stability. Organizations adopt FISMA for compliance, Basel III for resilience and market access.

Cybersecurity

FISMA

Federal Information Security Modernization Act (FISMA 2014)

Cost

€€€€

Complexity

Medium

Implementation Time

18-24 months

Key Features

Mandates NIST RMF 7-step risk management process
Requires continuous monitoring and diagnostics program
Enforces FIPS 199 system impact categorization
Demands annual independent IG maturity assessments
Extends requirements to federal contractors supply chains

Financial Risk Management

Basel III

Basel III international regulatory framework for banks

Cost

€€€

Complexity

Medium

Implementation Time

18-24 months

Key Features

Higher CET1 capital minimums and conservation buffers
Non-risk-based leverage ratio as model backstop
Liquidity Coverage Ratio for 30-day stress survival
Net Stable Funding Ratio for structural funding
Output floor constraining internal model RWA benefits

Detailed Analysis

A comprehensive look at the specific requirements, scope, and impact of each standard.

FISMA Details

What It Is

Federal Information Security Modernization Act (FISMA 2014) is a U.S. federal law establishing a risk-based framework for protecting federal information and systems. It mandates agency-wide information security programs using NIST Risk Management Framework (RMF) with 7 steps: Prepare, Categorize, Select, Implement, Assess, Authorize, Monitor.

Key Components

NIST SP 800-53 controls tailored by FIPS 199 impact levels (Low/Moderate/High).
Continuous monitoring via SP 800-137 and CDM tools.
Oversight by OMB, DHS/CISA, IGs with annual maturity assessments.
Compliance model includes SSPs, POA&Ms, ATOs, no formal certification but IG evaluations.

Why Organizations Use It

Federal agencies and contractors must comply legally; non-compliance risks funding loss, debarment. Provides risk reduction, resilience, market access for vendors. Builds trust, aligns cybersecurity with missions.

Implementation Overview

Phased RMF approach: governance/inventory, categorize/select controls, implement/assess/authorize, monitor/sustain. Applies to agencies, contractors; suits large enterprises to SMBs via scaling. Requires audits, reporting to OMB/Congress.

Basel III Details

What It Is

Basel III is the international prudential regulatory framework issued by the Basel Committee on Banking Supervision (BCBS) post-2007-09 financial crisis. It strengthens bank resilience through enhanced capital quality and quantity, leverage constraints, liquidity standards, and improved risk measurement comparability using a multi-metric, risk-based approach with non-risk-based backstops.

Key Components

**Three PillarsPillar 1 (capital ratios: CET1 4.5%, Tier 1 6%, Total 8% + buffers; leverage ratio 3%; LCR/NSFR); Pillar 2 (supervisory review/ICAAP); Pillar 3 (disclosures like RWA templates, CDC).
Revised risk approaches (credit, market, operational SMA), output floor (72.5%).
Built on Basel II, no formal certification—compliance via national laws.

Why Organizations Use It

Mandatory for internationally active banks to meet jurisdictional rules, avoid penalties.
Enhances solvency/liquidity resilience, reduces systemic risk, improves market discipline.
Drives strategic balance-sheet optimization, stakeholder trust, competitive positioning.

Implementation Overview

Phased enterprise transformation: governance, data/IT build, model validation, training.
Applies to large banks globally; involves QIS, parallel runs, supervisory audits. (178 words)

Key Differences

Aspect	FISMA	Basel III
Scope	Federal info systems security	Bank capital, liquidity, leverage
Industry	US federal agencies, contractors	Global banking sector
Nature	Mandatory US federal law	International banking standards
Testing	Continuous monitoring, IG audits	Stress tests, ICAAP reviews
Penalties	Contract loss, IG directives	Fines, activity restrictions

Scope

FISMA

Federal info systems security

Basel III

Bank capital, liquidity, leverage

Industry

FISMA

US federal agencies, contractors

Basel III

Global banking sector

Nature

FISMA

Mandatory US federal law

Basel III

International banking standards

Testing

FISMA

Continuous monitoring, IG audits

Basel III

Stress tests, ICAAP reviews

Penalties

FISMA

Contract loss, IG directives

Basel III

Fines, activity restrictions

Frequently Asked Questions

Common questions about FISMA and Basel III

FISMA FAQ

Basel III FAQ

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FISMA

Basel III

Quick Verdict

FISMA

Key Features

Basel III

Key Features

Detailed Analysis

FISMA Details

What It Is

Key Components

Why Organizations Use It

Implementation Overview

Basel III Details

What It Is

Key Components

Why Organizations Use It

Implementation Overview

Key Differences

Scope

Industry

Nature

Testing

Penalties

Frequently Asked Questions

FISMA FAQ

What is the primary objective of FISMA?

Who is legally or professionally required to comply with FISMA?

Does FISMA require an external audit or third-party certification?

How often should an assessment for FISMA be performed?

What are the consequences of non-compliance with FISMA?

Can FISMA be mapped to other international frameworks?

What is the first step to begin implementing FISMA?

Basel III FAQ

What is the primary objective of Basel III?

Who is legally or professionally required to comply with Basel III?

Does Basel III require an external audit or third-party certification?

How often should an assessment for Basel III be performed?

What are the consequences of non-compliance with Basel III?

Can Basel III be mapped to other international frameworks?

What is the first step to begin implementing Basel III?

You Might also be Interested in These Articles...

Measuring NIST CSF 2.0 Success: KPIs, Dashboards, and Continuous Improvement Using Tiers & Profiles

Step-by-Step Implementation Guide to ISO 27701: Building a Privacy Information Management System (PIMS) on Your ISO 27001 Foundation

Beyond the Boardroom: 5 Ways Modern Compliance Software Elevates Every Department

Run Maturity Assessments with GRADUM

Check out these other Gradum.io Standards Comparison Pages

DORA vs ISO 28000

EPA vs ISO 37301

CSL (Cyber Security Law of China) vs LEED