The estimated global shortfall in capital for banks, under the new capital adequacy standards known as Basel III, has been almost erased.

The Basel Committee on Banking Supervision published the results of its latest review of the implementation of Basel III today. The report shows that all of the large, internationally active banks it reviewed now meet the Basel III risk-based capital minimum requirement of 4.5%.

There still is a shortfall relative to the higher target level of 7.0% Tier 1 common equity, plus the surcharges on global systemically important banks. However, that shortfall for the biggest banks is now €3.9 billion, down from €15.1 billion at the end of 2013, and €485.6 billion in June 2011.

For the smaller banks in the review, there is still an estimated €0.1 billion shortfall from the minimum Basel III requirements. The shortfall from the higher target level is down to an estimated €1.8 billion, from €9.4 billion.

A total of 224 banks participated in the latest study, including 98 large internationally active, so-called Group 1 banks that have Tier 1 capital of more than €3 billion; and 126 so-called Group 2 banks, which is a sample of all other banks that fall under the Basel rules. The monitoring exercise assumes that the final Basel III rules are fully in force, based on data as of June 30, 2014, and do not take into account various transitional arrangements that allow banks to phase in the tougher requirements.

The report indicates that the average tier 1 capital ratios under the Basel III framework are now 10.8% for Group 1 banks and 11.8% for Group 2 banks.

As for the new liquidity requirements, the committee reports that the weighted average liquidity coverage ratio (LCR) for the Group 1 bank sample was 121%, up from 119% six months earlier. For Group 2 banks, the weighted average LCR was 140%, up from 132% six months earlier. The LCR requirement came into effect on January 1 of this year. Initially, the minimum requirement is set at 60%, rising to 100% by 2019. Of the banks in the sample, 80% reported an LCR that met or exceeded 100%, while 96% reported an LCR at or above 60%.

Finally, the committee measured compliance with the longer-term structural liquidity standard, known as the Net Stable Funding Ratio (NSFR). It reports that the weighted average NSFR for the Group 1 banks was 110%; for Group 2 banks it was 114%.