Top banks need $34b of capital by January 2027

Top international banks collectively need 30 billion euros ($34 billion) of capital by January 2027 to fully comply with rules aimed at avoiding taxpayer bailouts of lenders, regulators said on Wednesday.

The Basel Commitee of banking regulators from leading financial centres said their latest update on compliance to June 2018 does not reflect the final version of rules covering risks from swings in market prices for assets.

Ater heavy industry lobbying, those rules were reworked in January, a step Basel said would mitigate overall increases in capital.

The latest shortfall, based on data covering 189 banks, represents a fraction of total capital already being held.

It is 70 per cent smaller than at the end of 2015 when banks were building up buffers to meet the tougher capital rules ater many lenders were rescued by taxpayers in the financial crisis a decade ago.

Basel said all banks continue to meet its capital requirements at this stage in their phase-in.

Separately, the European Union’s banking watchdog said that to fully comply with Basel rules, banks in the bloc would need 39 billion euros of additional total capital, of which 24.2 billion comprises core, high-quality capital.

Basel’s rules are applied to all banks in the European Union, not just to the largest lenders.

Basel said banks were in full compliance with rules requiring them to hold “liquidity” buffers of assets that could be sold quickly in a crisis to avoid burning through capital.