Basel III monitoring: Capital requirement increases significantly

On September 26, 2023, the Deutsche Bundesbank published the updated version of the Basel III monitoring. Essentially, the aim is to assess the impact of the Basel III reform package on the banking sector. The focus is on the impact on capital requirements. Data voluntarily provided to the Bundesbank by 40 German banks served as a basis. The data cut-off date used was December 31, 2022. These 40 institutions represent just under half (47%) of the German banking sector in terms of risk-weighted assets (RWA). In this context, the Bundesbank expressly emphasizes that this is not a representative picture of the entire German banking sector.

The impact study has identified an increase in minimum capital requirements of 13.5%. In addition, the Common Equity Tier 1 ratio is assumed to decrease by 3.2%. The main cause is seen in the introduction of the output floor.

At the same time, the European Banking Authority (EBA) published its findings. The EBA's impact study covers 157 European banks and is therefore significantly more comprehensive. For more information, please refer directly to the EBA Basel III Report - Monitoring or the Deutsche Bundesbank study.

Curious now?

Around the topic Basel III we recommend our free web seminar on November 24, 2023 "CRR III - Insight into the new requirements for credit institutions". You can register for free today via the CURENTIS Web Seminars link.