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Basel says top banks meet global capital rules in full
[LONDON] The world's leading banks have fully met new minimum capital rules almost five years ahead of time, the Basel Committee of banking supervisors said on Tuesday.
The 2007-09 financial crisis forced taxpayers to rescue banks, prompting policymakers to pass a set of tougher capital rules, known as Basel III, which take full effect in January 2019. "Data as of 30 June 2014 show that all (98) large internationally active banks now meet the Basel III risk-based capital minimum requirements," the Basel Committee said in a statement.
The latest data signals that European banks in particular have caught up.
Banks across the world have come under pressure from markets and some regulators to comply early with the Basel rules to help restore investor confidence in the sector.
The world's top 30 banks, such as Goldman Sachs and Morgan Stanley must also meet a capital "surcharge"because of their size and global reach.
The shortfall in meeting this surcharge was only 3.9 billion euros (US$4.36 billion) last June, a tiny fraction of their profits, compared with 15 billion euros as of 31 December 2013, and 486 billion euros as of 30 June 2011.
Leading banks also fully meet another Basel rule, known as the liquidity covered ratio, that requires them to hold a buffer of bonds to tide them over a month-long market shock.