Banks on track with Basel Capital requirements
15 September 2016 Basel
Image: Shutterstock
Important financial institutions are largely meeting their targets for Basel III capital requirements, according to the Basel Committee on Banking Supervision’s latest Basel III Monitoring Report.
The report included data from 100 large and internationally active institutions with capital of €3 billion or more, classed as ‘group-one’ banks, which will include some of the largest agent lenders.
It also used reports from 128 additional banks, classed as ‘group two’.
As of 31 December 2015, when the minimum Liquidity Coverage Ratio (LCR) requirement was set at 60 percent. Average LCR for group-one banks however, was 125.2 percent. For group two banks, average LCR was 141.1 percent.
Of group-one banks, 85.6 percent already exceed the 100 percent final target, scheduled for 2019 after a staggered increase. Only one bank was not meeting the current 60 percent minimum LCR target.
For group-two banks, 82.9 percent had an LCR exceeding 100 percent, and, again, only one bank fell short of the 60 percent target.
According to BCBS, the relevant national supervisory authorities have taken action with those banks that missed the target, in order to correct the problem.
Results were similarly positive for the net stable funding ratio (NSFR) requirement. Average NSFR was 113.7 percent for group-one banks and 115.9 percent for group-two banks, well in excess of the target levels of 100 percent.
Of group-one banks, 79 percent either met or exceeded the 100 percent minimum, as did 87 percent of group-two banks.
Almost 96 percent of group-one banks were found to be close to meeting the target, with NSFRs of 90 percent or more. This was also the case for 97.2 percent of group-two banks.
The 100 percent NSFR will become a minimum standard on 1 January 2018.
The report included data from 100 large and internationally active institutions with capital of €3 billion or more, classed as ‘group-one’ banks, which will include some of the largest agent lenders.
It also used reports from 128 additional banks, classed as ‘group two’.
As of 31 December 2015, when the minimum Liquidity Coverage Ratio (LCR) requirement was set at 60 percent. Average LCR for group-one banks however, was 125.2 percent. For group two banks, average LCR was 141.1 percent.
Of group-one banks, 85.6 percent already exceed the 100 percent final target, scheduled for 2019 after a staggered increase. Only one bank was not meeting the current 60 percent minimum LCR target.
For group-two banks, 82.9 percent had an LCR exceeding 100 percent, and, again, only one bank fell short of the 60 percent target.
According to BCBS, the relevant national supervisory authorities have taken action with those banks that missed the target, in order to correct the problem.
Results were similarly positive for the net stable funding ratio (NSFR) requirement. Average NSFR was 113.7 percent for group-one banks and 115.9 percent for group-two banks, well in excess of the target levels of 100 percent.
Of group-one banks, 79 percent either met or exceeded the 100 percent minimum, as did 87 percent of group-two banks.
Almost 96 percent of group-one banks were found to be close to meeting the target, with NSFRs of 90 percent or more. This was also the case for 97.2 percent of group-two banks.
The 100 percent NSFR will become a minimum standard on 1 January 2018.
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