Final Basel III lifts Tier 1 capital needs by 2.2 percent
Large internationally active banks face an average Tier 1 capital requirement increase of 2.2 percent under the fully phased-in Basel III framework, based on end-2025 data. The collective regulatory capital shortfall for Group 1 institutions reached €1.2 billion.
Capital buffers hold as liquidity stays above target
The fully phased-in Basel III framework increases the Tier 1 minimum required capital for Group 1 banks by an average of 2.2 percent, up from 1.7 percent recorded at the end of June 2025.
This rise reflects a larger sample size of reporting institutions rather than worsening balance sheets.
Group 1 banks reported an aggregate regulatory capital shortfall of €1.2 billion, compared with €0.9 billion six months earlier.
Liquidity positions remained comfortable across the sector.
The weighted average Liquidity Coverage Ratio for Group 1 banks rose to 136.6 percent, while the Net Stable Funding Ratio eased slightly to 123.3 percent.
Every bank in the sample maintained both ratios above the 100 percent requirement.
Counting down to the 2028 finish line
The monitoring exercise covers 149 institutions, comprising 106 Group 1 banks with Tier 1 capital exceeding €3 billion and 43 smaller Group 2 lenders.
Among the Group 1 institutions, 29 are classified as global systemically important banks.
Implementation of the final Basel III standards began on January 1, 2023, with transitional arrangements set to expire on January 1, 2028.
The Basel Committee calculates the fully phased-in impact assuming static balance sheets without factoring in future bank profitability.
A manageable final stretch
A capital shortfall of just €1.2 billion across 106 global banks proves that the finish line is already in sight.
Liquidity buffers comfortably above regulatory minimums confirm the resilience of major balance sheets.
The remaining friction is political fragmentation in national rollout schedules rather than bank solvency.