Featured Product

    EBA Reports Examine Implementation of Basel III and Liquidity Measures

    October 02, 2019

    EBA published two reports that monitor the impact of the implementation of the final Basel III reforms and of the liquidity measures in EU. The EBA Basel III capital monitoring report is the latest in a regular exercise using the BCBS methodology and is not comparable to the broader Call for Advice report published in July 2019. The report includes an assessment of the impact of the full implementation (to 2027) of the Basel III package on EU banks based on data as of June 30 2018. The report on liquidity measures evaluates the implementation of liquidity coverage requirements in place in EU.

    Report on Basel III monitoring. The baseline impact assessment methodology quantifies the differences in the Pillar 1 minimum required capital between the current EU implementation of the Basel standards (Capital Requirements Regulation or CRR/Capital Requirements Directive (CRD) IV) and the full Basel III implementation. Overall, EBA estimates that the Basel III reforms, once fully implemented, would determine an average increase of 19.3% in tier 1 minimum required capital of banks in EU. The impact of the risk-based reforms is 20.4%, of which the leading factors are the output floor (5.4%) and operational risk (4.7%). Compared with the current fully phased-in CRR/CRD IV rules, under Basel III full implementation the tier 1 capital shortfall increases for all banks, but particularly for global systemically important institutions. To comply with the Pillar 1 requirements in the new framework, EU banks would need EUR 26 billion of additional total capital, of which EUR 24.9 billion of tier 1 capital. The results of this exercise are based on data as of December 31, 2018.  

    Report on monitoring of liquidity measures. The report shows that EU banks have continued to improve their compliance with the liquidity coverage ratio (LCR). The LCR, which was fully implemented in January 2018, stood at nearly 149% on average in June 2018, well above the minimum threshold of 100%. The LCR level of global systemically important institutions stood at 145% and that of other systemically important institutions at 144%. The weighted average LCR of the remaining banks was higher at 183%. The aggregate gross shortfall amounted to EUR 15.7 billion and it is entirely attributed to four banks that monetized their liquidity buffers during times of stress. An in-depth analysis of the potential currency mismatches in LCR levels suggests that banks tend to hold significantly lower liquidity buffers in some foreign currencies, in particular USD and GBP. In some cases, LCR ratios in USD or GBP are well below 100%. The analysis of the impact of the LCR on lending does not provide clear empirical evidence of this relationship. The analysis is based on Common Reporting  or COREP.

     

    Related Links

    Keywords: Europe, EU, Banking, Basel III, Basel III Monitoring, Liquidity Monitoring, Regulatory Capital, Liquidity Risk, CRR/CRD, LCR, EBA

    Featured Experts
    Related Articles
    News

    UK Government to Set Out Rules on Wind-down of Critical Benchmarks

    HM Treasury notified that, after considering all responses, the government intends to bring forward further legislation, when the Parliamentary time allows, to address issues identified in the consultation on supporting the wind-down of critical benchmarks.

    May 07, 2021 WebPage Regulatory News
    News

    EIOPA Launches Stress Test for Insurance Sector in EU

    EIOPA launched the 2021 stress test for the insurance sector in EU.

    May 07, 2021 WebPage Regulatory News
    News

    UK Authorities Publish Third Edition of Regulatory Initiatives Grid

    UK authorities jointly published the third edition of Regulatory Initiatives Grid setting out the planned regulatory initiatives for the next 24 months.

    May 07, 2021 WebPage Regulatory News
    News

    EC Consults on Regulation on Non-Financial Sustainability Disclosures

    EC is requesting feedback on the proposed Commission Delegated Regulation on the content, methodology, and presentation of information that large financial and non-financial undertakings should disclose about their environmentally sustainable economic activities under the Taxonomy Regulation.

    May 07, 2021 WebPage Regulatory News
    News

    OSFI Outlines Prudential Policy Priorities for Coming Months

    OSFI has set out the near-term priorities for federally regulated financial institutions and federally regulated private pension plans for the coming months until March 31, 2022.

    May 06, 2021 WebPage Regulatory News
    News

    BIS Announces TechSprint on Innovative Green Finance Solutions

    Under the Italian G20 Presidency, BIS Innovation Hub and the Italian central bank BDI launched the second edition of the G20 TechSprint on the lookout for innovative solutions to resolve operational problems in green and sustainable finance.

    May 06, 2021 WebPage Regulatory News
    News

    ACPR Publishes Version 1.0.0 of RUBA Taxonomy

    ACPR published Version 1.0.0 of the RUBA taxonomy, which will come into force from the decree of January 31, 2022.

    May 06, 2021 WebPage Regulatory News
    News

    EBA Proposed Regulatory Standards for Central Database on AML/CFT

    EBA proposed the regulatory technical standards on a central database on anti-money laundering and countering the financing of terrorism (AML/CFT) in EU.

    May 06, 2021 WebPage Regulatory News
    News

    ECB Responds to EC Consultation on Crisis Management Framework

    ECB published its response to the targeted EC consultation on the review of the bank crisis management and deposit insurance framework in EU.

    May 06, 2021 WebPage Regulatory News
    News

    BCBS, CPMI, and IOSCO to Survey Market Participants on Margin Calls

    BCBS, CPMI, and IOSCO (the Committees) are inviting entities that participate in market infrastructures and securities markets through an intermediary as well as non-bank intermediaries to complete voluntary surveys on the use of margin calls.

    May 05, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6942