It is imperative that more robust peer reviews by G-20 countries take place with industry involvement to ensure consistent implementation. While there has been a consensus reached among global regulators on capital requirements, we have yet to reach the same for liquidity coverage ratios (LCRs) and net stable funding ratios (NSFRs).
||31 December 2006
||31 December 2011
||1 January 2019*
*Implementation begins 1 January 2013
Capital and Liquidity Ratios
Through Basel III, the Basel Committee on Banking Supervision (BCBS) is introducing a countercyclical capital buffer within the range of zero to 2.5 percent of risk-weighted assets. Banks must meet the buffer with Common Equity Tier 1 – possible use of other fully loss absorbing capital is still under review.
Notably, the final text does not define a surcharge for systemically important financial institutions (SIFIs), but says that SIFIs “should have loss-absorbing capacity beyond the minimum standards and the work on this issue is ongoing.” The BCBS is developing a proposal on a methodology comprising both quantitative and qualitative indicators to assess the systemic importance of financial institutions at a global level.