According to a Reuters report, the biggest banks in the world would need to fill a USD155 billion or EUR115 billion capital shortfall in order to comply with stricter regulations by the Basel Committee. Over 60% of the shortfall, or EUR70 billion were in European banks, where lenders are reportedly slow to stregthen its financial positions.
On Wednesday, The Basel Committee of global regulators said the capital shortfall was based on a requirement that banks should have a 7% minimum core capital level and required capital surcharges for the bigger banks. The Committee had based its findings on balance sheets as per end of 2012.
Global markets and regulators had been moving banks early to be compliant in global Basel III accord, or the voluntary regulatory standard on capital adequacy, market liquidity risk and stress testing in banks. This is to erase doubts by investors about the capability of banks to thrive when the former buys the latter's shares and bonds.
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