European banks pay the price of Basel III

Author: Lizzie Meager | Published: 11 Sep 2015

Association for Financial Markets in Europe’s (Afme) report for the second quarter has shown that banks are making strong advances in their Basel III implementation.

Between December 2013 and June 2015, 14 EU global systemically important banks (G-Sibs) increased their Common Equity Tier 1 (CET1) ratios from 10.8% to 11.9% on a phased-in basis, and from 10.2% to 11.6% on an end-point basis. The minimum requirement from 2019 onwards is between 8% and 12%, which suggests that European G-Sibs are well ahead of the curve.

To comply with Basel III’s capital requirements, banks’ issuance of contingent convertible instruments (CoCos) has also sharply risen. In the...



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