EBA Publishes Results of the CRDIV-CRR/Basel III Monitoring Exercise as of June 30, 2015

On March 2, the European Banking Authority (“EBA”) published its report of its ninth Basel III monitoring exercise, particularly on the impact of the fully implemented Capital Requirements Directive and the Capital Requirements Regulation (CRDIV-CRR).

The exercise allowed the gathering of aggregate results on capital and liquidity ratios for banks in the European Union and the report summarizes the results using data as of June 30, 2015.

The results showed a further improvement of European banks’ capital positions with only a small number of banks suffering from potential capital shortfalls.

The exercise monitored the leverage ratio, as defined in EU legislation, for the first time and indicated that the leverage ratio is a binding regulatory constraint for a significant number of institutions in the sample.

The results showed that there has been an increase in banks’ liquidity coverage ratio over time, which the EBA attributed to structural adjustments and a recalibration of the liquidity coverage ratio framework, which was published in January 2013.  Report.