42250157 - business investment opportunities on a global scale

The world’s big banks continue to build their capital positions and move toward compliance with global standards, according to the latest data from the Basel Committee on Banking Supervision.

The group released its latest assessment of banks’ compliance with the fully phased-in final global capital standards, known as Basel III, which take full effect in 2027.

The review finds that the large, internationally active banks have trimmed their capital shortfall from €30.1 billion in mid-2018 to €23.5 billion by the end of 2018.

The smaller banks it reviewed also cut their combined shortfall from €6.0 billion to €3.8 billion.

The Basel Committee says that these shortfalls are almost 75% smaller than they were at the end of 2015, primarily due to higher levels of eligible capital.

For the banks that also have total loss-absorbing capacity (TLAC) requirements, their TLAC shortfall has declined from €108.8 billion to €78.0 billion.

In terms of the Basel III liquidity requirements, the review finds that the weighted average liquidity coverage ratio (LCR) for the big banks improved to 136% from 135%, but declined slightly from 180% to 177% for the smaller banks.

The weighted average net stable funding ratio (NSFR) for the big banks remained stable at 116%, and increased slightly to 120% among the smaller banks.