Bank for International Settlements Basel III monitoring shows higher risk-based capital ratios and a EUR 0.9 billion shortfall for large banks

The Bank for International Settlements published its latest Basel III monitoring exercise, showing that risk-based capital ratios for large internationally active banks rose in the first half of 2024, while the leverage ratio and Net Stable Funding Ratio (NSFR) were broadly stable and the Liquidity Coverage Ratio (LCR) declined slightly. The report uses data as of 30 June 2024 to describe trends in current capital and liquidity metrics and to estimate the impact of applying the fully phased-in Basel III framework, including the December 2017 finalisation of reforms and the January 2019 market risk framework, across both Group 1 and Group 2 banks. Under the fully phased-in final Basel III framework, the average impact on Group 1 banks’ Tier 1 minimum required capital increased to +1.9% (from +1.3% at end-December 2023), and Group 1 banks reported a minor regulatory capital shortfall of EUR 0.9 billion (all in Tier 2), compared with no shortfall in the previous period. For liquidity, the weighted average LCR for Group 1 banks fell to 136%, with three Group 1 banks below the 100% minimum, while the weighted average NSFR was stable at 124% and remained above the 100% minimum for all banks. The release is accompanied by redesigned interactive dashboards and expanded explanatory text covering additional topics including market risk, counterparty credit risk and credit valuation adjustment risk. The monitoring sample covers 176 banks, including 115 Group 1 banks (Tier 1 capital above EUR 3 billion, including 29 global systemically important banks) and 61 Group 2 banks.