European banks failed to meet Basel III rules in 2011

5 April 2012

Leading banks across Europe would have posted a huge shortfall on their minimum capital requirements had the upcoming Basel III rules been in force last year.

New data published by the European Central Bank (ECB) has shown that continental financiers were around €242 billion ($316 billion) below the requirement that will be imposed in regulatory changes as of January 2013.

The ECB figures indicated that more than half - 27 out of 48 - of the region's major banks recorded tier 1 capital adequacy ratios of below the Basel III-targeted level of seven per cent of their assets.

Meanwhile, ten organisations had core capital figures of less than 4.5 per cent.

Updated rules are to come into force from the beginning of next year as regulators attempt to prevent any repeat of the banking crisis seen in recent times.

Earlier this week (2 April), the Financial Times reported that lenders such as BNP Paribas and La Caixa are planning to pay back around 33 per cent of their ECB three-year loans by the end of 2012.

By Gary Cooper

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