06 March 2018

Basel III monitoring results published by the Basel Committee

The Basel III minimum capital requirements are expected to be fully phased-in by 1 January 2019 (while certain capital instruments could still be recognised for regulatory capital purposes until end-2021). On a fully phased-in basis, data as of 30 June 2017 show that all banks in the sample meet both the Basel III risk-based capital minimum Common Equity Tier 1 (CET1) requirement of 4.5% and the target level CET1 requirement of 7.0% (plus any surcharges for G-SIBs, as applicable). Between 31 December 2016 and 30 June 2017, Group 1 banks continued to reduce their capital shortfalls relative to the higher total capital target levels; in particular, the Tier 2 capital shortfall has decreased from €0.3 billion to €24 million. As a point of reference, the sum of after-tax profits prior to distributions across the same sample of Group 1 banks for the six-month period ending 30 June 2017 was €212.8 billion. In addition, applying the 2022 minimum requirements for Total Loss-Absorbing Capacity (TLAC), 10 of the G-SIBs in the sample have a combined incremental TLAC shortfall of €109 billion as at the end of June 2017, compared with €116 billion at the end of December 2016.

The monitoring reports also collect bank data on Basel III's liquidity requirements. Basel III's Liquidity Coverage Ratio (LCR) was set at 60% in 2015, increased to 80% in 2017 and will continue to rise in equal annual steps to reach 100% in 2019. The weighted average LCR for the Group 1 bank sample was 134% on 30 June 2017, up from 131% six months earlier. For Group 2 banks, the weighted average LCR was 175%, up from 159% six months earlier. Of the banks in the LCR sample, 99% of the Group 1 banks (including all G-SIBs) and all Group 2 banks in the sample reported an LCR that met or exceeded 100%. All banks reported an LCR at or above the 90% minimum requirement that will be in place for 2018.

Basel III also includes a longer-term structural liquidity standard - the Net Stable Funding Ratio (NSFR). The weighted average NSFR for the Group 1 bank sample was 117%, while for Group 2 banks the average NSFR was 118%. As of June 2017, 93% of the Group 1 banks (including all G-SIBs) and 94% of the Group 2 banks in the NSFR sample reported a ratio that met or exceeded 100%, while all Group 1 banks and 99% of the Group 2 banks reported an NSFR at or above 90%.

Press release

© BCBS (BIS)