LONDON, Sept 26 (Reuters) – Banks in the European Union already largely meet stricter global capital requirements ahead of a 2028 deadline, with the shortfall now down to 600 million euros ($635.8 million), the bloc’s banking watchdog said on Tuesday.
The global Basel Committee agreed additional capital requirements in 2017, the last leg of its revamp of core mandatory buffers after lenders had to be bailed out during the global financial crisis of 2008.
The EU, along with Britain and the United States, is now putting the final Basel requirements into its rule books.
The European Banking Authority (EBA) on Tuesday published the results of its monitoring exercise of 157 banks across the EU at the end of 2022, which scrutinised how they were implementing Basel rules.
“The main finding is that to comply with the new framework, EU banks would need a total of 0.6 billion euro of additional Tier 1 capital at the full implementation data in 2028,” EBA said.
“Overall, the results of the mandatory Basel III capital monitoring exercise show that European banks’ minimum Tier 1 capital requirement would increase by 9.0% at the full implementation date in 2028.”
Basel has said its remaining rules should be implemented by 2028, but EU policymakers have proposed longer phase-ins for some of the rules, and temporary waivers for others.
The rules are due to be rolled out in the EU from January 2025.
The United States has proposed beginning its “Basel Endgame” six months later and completing it in 2028, though regulators are facing a heavy backlash from banks who say capital burdens will rise significantly.
Banks in Britain are also lobbying for the Bank of England to align its roll out start date with the United States, and to soften some of the rules in line with steps being taken by the EU. The BoE is due to set out its final Basel Endgame rules sometime in 2024.
($1 = 0.9437 euros)
Reporting by Huw Jones; Editing by Jacqueline Wong
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