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All major global banks now meet Basel III requirements
Central Bank News
The world's 224 major international banks now meet the risk-based capital requirements under the tougher Basel III banking regulations and have further narrowed the shortfall in capital required to meet targets for 2019, according to the Basel Committee on Banking Supervision (BCBS).
The Basel Committee, which sets global standards for banking supervision, said the aggregate shortfall for the 98 largest internationally active banks relative to the 7 percent target for common equity (CET 1) in 2019 amounted to 3.9 billion euros as of June 30, 2014, down from a shortfall of 15.1 billion as of end-2013 and from a shortfall of 485.6 billion euros on June 30, 2011.
In comparison, these 98 banks - known as Group 1 banks with Tier 1 capital in excess of 3 billion euros - had total after-tax profits prior to distributions of 210.1 billion euros in the six months ending June 30, 2014.
The shortfall for the smaller Group 2 banks, which have Tier 1 capital below 3 billion euros, narrowed to a mere 0.1 billion euros relative to the minimum level of 4.5 percent and was 1.8 billion relative to the 7.0 percent target, down from shortfalls of 2.0 billion and 9.4 billion, respectively from the previous survey in September last year.
The Basel Committee, which groups supervisory authorities from almost 30 jurisdictions, has published six previous reviews of how Basel III rules will impact banks and financial markets.
Basel III was agreed by global leaders ion 2010 in an effort to strengthen the global financial system following the crises in 2008, and imposed higher capital charges on banks to ensure they had enough of a cushion to withstand the stress from a financial crises along with stricter supervision.
The Basel Committee on Banking Supervision issued the following statement: