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Q1 2014 Banking Review: Basel III Common Equity Tier 1 Capital Ratio 

June 4, 2014

U.S. banking giants formally started reporting their capital condition in terms of the Basel III capital requirements in the first quarter of this year, marking the first step towards a fully phased-in disclosure under the new rules by 2019. These changes make it difficult to compare the banks’ statutory capital ratios for Q1 2014 with the reported figures in previous quarters; fortunately, the country’s largest banks have been reporting their pro forma fully-phased in Basel III capital ratios since late 2012, allowing us to understand the quarter-on-quarter capital ratio changes for these banks over the period fairly well.

These banks have prioritized Basel III compliance over recent years – something that they could achieve in tandem with their profitability goals, which required them to make sweeping changes to their business model. This would explain why many global banking giants have already met their Tier I common capital requirements, although full compliance is only expected by the end of 2019.

Read more: Forbes

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