Banks relieved at delay in liquidity rule
Source: Bloomberg News |
March 20, 2013, Wednesday
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Print Edition
Print Edition
THE largest global banks would have needed an extra 208.2 billion euros (US$269.2 billion) in their core reserves to meet so-called Basel III capital rules had the standards been enforced in June 2012, raising capital levels by about 166 billion euros from the end of the previous year.
Global banks also had an average leverage ratio of 3.8 percent versus a target of 3 percent ratio for banks' equity to debt, the Basel Committee on Banking Supervision said yesterday in a statement on its website. The Basel measures are set to be phased in by 2019.
"The committee appreciates the significant efforts contributed by both banks and national supervisors to this ongoing data collection exercise," the Basel group said.
Global regulators have clashed with lenders over the severity of the capital and liquidity rules, which were set out in 2010 as part of an overhaul of banking regulation in the wake of the financial crisis that followed the collapse of Lehman Brothers Holdings Inc. The Basel III measures will more than triple the core capital that lenders must hold to at least 7 percent of their assets, weighted for risk.
The biggest lenders in Europe would have needed a combined 112.4 billion euros to reach the core tier one capital target of 7 percent, the European Banking Authority said in a separate statement yesterday.
Both the European Union and the US missed a January 2013 deadline to begin phasing in the standards, and have said they will seek to apply them from next year.
The lenders surveyed also needed a combined 2.4 trillion euros to meet another liquidity rule set by the Basel committee, which would force banks to back long-term lending with funds that are unlikely to dry up in a crisis.
Global banks also had an average leverage ratio of 3.8 percent versus a target of 3 percent ratio for banks' equity to debt, the Basel Committee on Banking Supervision said yesterday in a statement on its website. The Basel measures are set to be phased in by 2019.
"The committee appreciates the significant efforts contributed by both banks and national supervisors to this ongoing data collection exercise," the Basel group said.
Global regulators have clashed with lenders over the severity of the capital and liquidity rules, which were set out in 2010 as part of an overhaul of banking regulation in the wake of the financial crisis that followed the collapse of Lehman Brothers Holdings Inc. The Basel III measures will more than triple the core capital that lenders must hold to at least 7 percent of their assets, weighted for risk.
The biggest lenders in Europe would have needed a combined 112.4 billion euros to reach the core tier one capital target of 7 percent, the European Banking Authority said in a separate statement yesterday.
Both the European Union and the US missed a January 2013 deadline to begin phasing in the standards, and have said they will seek to apply them from next year.
The lenders surveyed also needed a combined 2.4 trillion euros to meet another liquidity rule set by the Basel committee, which would force banks to back long-term lending with funds that are unlikely to dry up in a crisis.
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