Advertise On EU-Digest

Annual Advertising Rates

9/25/13

European Banking Rules: World’s biggest banks have US$155B capital shortfall, most in Europe

The world’s biggest banks would need to boost their capital by US$155 billion to comply with tougher rules and more than 60% of that shortfall is in Europe, where lenders have been slower to strengthen.

The capital shortfall fell by 83 billion euros during the second half of last year as banks retained more of their profits and raised capital, although the pace of improvement was not as quick in Europe as elsewhere.

The Basel Committee of global regulators said on Wednesday the shortfall at top international banks was based on a target to hold a minimum core capital level of 7%, plus capital surcharges required for the biggest banks. Its finding was based on their balance sheets at the end of last year.

Some 70 billion euros of the shortfall was at banks in the European Union, representing 61% of the global deficit. The shortfall at EU banks was cut by 29 billion euros in the second half of last year, according to a European Banking Authority (EBA) estimate.

Markets and regulators have been putting pressure on banks to move early to comply with the global Basel III accord being phased in, to dispel any doubts about their ability to thrive and encourage investors to buy their bonds and shares.

Read more: World’s biggest banks have US$155B capital shortfall, most in Europe | Financial Post

No comments: