Major international banks would have fallen significantly short of the incoming Basel III capital rules had been place last year, new figures have shown.
According to data released today (13 April) by the Basel Committee, big financiers would have required an extra €486 billion ($638 billion) to meet these requirements had the regulations been enforced in the middle of 2011.
As of January next year, banks will be obliged to hold a core ratio of seven per cent of assets as regulators seek to reduce the possibility of any repeat of the financial crisis, but many lenders are currently struggling to reach this level.
Indeed, the 103 biggest banks in the world had an average capital ratio of 7.1 per cent at the time of the review, which shows it is marginal whether they will be able to meet the regulations.
This comes shortly after the European Central Bank revealed that financiers on the continent were some $316 billion short of Basel III last year.
By Claire Archer