On 10 December 2020, the European Banking Authority (EBA) issued a report on the impact of implementing the final Basel III reforms in the EU. The full Basel III implementation, in 2028, would result in an average increase of 15.4% on the current Tier 1 minimum required capital of EU banks. The results do not reflect the economic impact of the COVID-19 pandemic on participating banks as the reference date of this impact assessment is December 2019.
Beyond the results of the report, the EBA will also publish, on 15 December 2020, a more detailed ad hoc report, which will respond to the European Commission’s Call for Advice (CfA) on Basel III, based on the same reference date (December 2019). The cumulative results of the report are not directly comparable to those of the CfA report, as they are based on slightly different samples (composition and size) and two key methodological differences. The more important methodological difference relates to the application of different buffers. Another, less significant, difference is the sequence of estimating the capital requirements for the output floor and the leverage ratio, respectively. The latter difference has an impact on the minimum required capital assigned to these two categories, but not on the cumulative impact.