Basel Committee Finalizes Post-Crisis Capital Reforms
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- On December 7, the Basel Committee on Banking Supervision finalized its post-crisis capital adequacy framework.
- Although a quantitative impact study conducted by the Basel Committee suggests that, on average, the revisions will not have a significant impact on banks’ capital requirements, the effect of these revisions varies significantly across individual banks and jurisdictions. These revisions are expected to have a disproportionate impact on European banks, significantly increasing capital requirements for many European banks if the revisions are ultimately adopted.
- The U.S. banking agencies issued a statement supporting the finalization of these reforms, but the agencies still need to consider how to appropriately apply these revisions in the United States. Any proposed changes will be made through the standard notice-and-comment rulemaking process.