After a decline in the first half of 2022, the largest banks around the world once again raised their best-quality capital ratios above the level seen before the pandemic in the second half of last year, according to Bank for International Settlements (BIS), which is a type of central bank for central banks. The leverage index, which indicates the willingness of these institutions to lend, rose further in Europe and the Americas after falling during the Covid-19 crisis, according to a survey conducted by the Swiss-based organization, released on Tuesday 26.
The BIS sample takes into account 178 banks, the majority of which have an international presence. The indicators were assessed from institutions based in 26 countries, including two from Brazil and places such as the US, UK, China, Japan, Spain, France, Germany, India and others. The names were not revealed.
The so-called Tier 1 capital (CET1), the best quality capital, from Group 1, in which the two Brazilian banks were considered, rose to 13.1% at the end of December 2022, compared to 12.7% at the end of December 2022. End of June . In the case of systemically important banks, known as “too big to fail” or G-SIBs, after their English acronym, the index was also 13.1% compared to 12.6% in that order.
“Basel III capital ratios rose above pre-pandemic levels in the second half of 2022 and liquidity coverage ratios (LCRs) decreased but remained above pre-pandemic levels,” the Bank for International Settlements said in a press release. According to the organization, the average liquidity coverage ratio for the first group banks decreased to 132%, and in three institutions the indicator fell to less than 100%.
In turn, the leverage ratio of the first group banks increased to 6.1% at the end of last December, compared to 5.8% in the measurement conducted in June 2022. Among the banks considered too big to fail, it reached 5.9% compared to 5.7%, respectively. Same basis of comparison
Dividend distribution from large banks also followed an upward trend in the period assessed by the BIS, as the restrictions adopted during the pandemic had already ended.
The survey, conducted by the Bank for International Settlements, provides details on the implementation of new Basel III rules, which determine when a bank can lend without compromising its capital. The set of requirements was an enhancement to the requirements of regulators for the global financial system after the 2009 financial crisis, but its adoption schedule has become more flexible due to the COVID-19 pandemic.
The implementation of the final minimum requirements of Basel III began on January 1, 2023. The average impact of the final phase of the adoption of the new rules on the required Tier 1 capital (MRC) of Group 1 banks was +3.0% at the end of last December compared to +2.8% in June. 2022, according to the Bank for International Settlements. The regulatory capital deficit was reduced to 3.2 billion euros, compared to 7.8 billion euros in this arrangement.
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