EBA Reports on Basel III Monitoring Exercise as of June 30, 2017

The European Banking Authority (“EBA“) published a report, available here, summarizing the results of the latest EU Basel III monitoring exercise, using data as of June 30, 2017. The report was accompanied by a press release.

The report contains analysis relating to matters such as:

  • Capital ratios
  • Capital shortfalls
  • Impact of phase-in arrangements
  • Composition of capital and risk-weighted assets (“RWAs“)
  • Composition of the leverage ratio exposure measure
  • Liquidity coverage ratio (“LCR“)
  • Net stable funding ratio (“NSFR“)

The report highlights an improved capital position for EU banks, with a total average common equity tier 1 (“CET1“) ratio of 13.8%, an improvement from the 13.4% ratio as on December 31, 2016. Average LCR was 143.1% as of December 31, 2016, as opposed to 139.5% as of December 2016, and the overall average NSFR ratio was 112.3%, up from 112.0% as of December 2016.

The impact of Basel III is monitored semi-annually by the Basel Committee on Banking Supervision (“BCBS“) at a global level and by the EBA at EU level.