Revised Basel output floor to bind 41% of European banks
Cap on modelled capital will also constrain 6% of Americas banks and 34% of banks from the rest of the world
The Basel III output floor on modelled capital requirements will become the binding regulatory constraint for four out of 10 European banks sampled in a Basel Commitee report.
The committee estimates that the new output floor – which bars banks from reducing their modelled capital requirements below 72.5% of the amount generated by the revised Basel III standardised approach by 2027 – will impose the single largest Tier 1 capital requirement on 41.4% of European banks sampled.
Currently, the
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