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Basel III would have required banks to find extra £299bn, last year If new rules requiring banks to hold more capital had been in place last year, the world’s major banks would have needed to find €374bn (£299bn) of bolster their financial strength. The rules - known as Basel III - do not formally come into force until 2019 although policy makers expect banks to adopt the demands that they hold more capital ahead of that formal deadline. However, while banks are short of the capital they need, the gap has narrowed from a year ago by €111bn (£88.8bn), according to the official assessment by the regulators who designed the rules in Basel, Switzerland. The target is to hold capital of 7% of their risk weighted assets and is a key measure of a bank’s financial strength. The banks can find the extra capital by retaining more profits, reducing their riskiest loans and axing bonuses for staff. New rules for the amount of liquid instruments banks must hold that can be sold quickly during times of crisis are also being introduced and the Basel supervisors found that there was still a shortfall of €1.8bn (£1.44bn) for banks in reaching the new target.

Basel III would have required banks to find extra £299bn, last year


If new rules requiring banks to hold more capital had been in place last year, the world’s major banks would have needed to find €374bn (£299bn) of bolster their financial strength.

The rules - known as Basel III - do not formally come into force until 2019 although policy makers expect banks to adopt the demands that they hold more capital ahead of that formal deadline.

However, while banks are short of the capital they need, the gap has narrowed from a year ago by €111bn (£88.8bn), according to the official assessment by the regulators who designed the rules in Basel, Switzerland.

The target is to hold capital of 7% of their risk weighted assets and is a key measure of a bank’s financial strength. The banks can find the extra capital by retaining more profits, reducing their riskiest loans and axing bonuses for staff.

New rules for the amount of liquid instruments banks must hold that can be sold quickly during times of crisis are also being introduced and the Basel supervisors found that there was still a shortfall of €1.8bn (£1.44bn) for banks in reaching the new target.