Look - the wicked witch has surfaced
no signs of 'toning down the rhetoric"
Look - the wicked witch has surfaced
no signs of 'toning down the rhetoric"
evening
Oct 1
Basel 3 Capital Requirements
According to the Basel Committee on Banking Supervision, the Basel III capital requirements are designed to strengthen bank capital requirements, increase holdings of high-quality liquid assets, and decrease bank leverage. As of October 1, the key capital requirements are:
Common Equity Tier 1 (CET1): At least 4.5% of risk-weighted assets (RWAs)
Tier 1 Capital: At least 6% of RWAs
Total Capital: At least 8.0% of RWAs
These requirements are intended to ensure that banks maintain a sufficient buffer to absorb potential losses and maintain financial stability.
Buffer Capital Requirements:
Conservation buffer: 2.5% of RWAs (in addition to the 4.5% CET1 requirement)
Countercyclical buffer: 0-2.5% of RWAs (varies by country and economic conditions)
Leverage Ratio:
Minimum leverage ratio: 3% (Tier 1 capital divided by total assets)
These requirements are designed to mitigate the risk of bank failures and reduce the risk of systemic crises. As of October 1, banks must comply with these capital requirements to ensure their stability and resilience.