Here is the Basel III RCAP report.

On first sight, it looks bad: “In view of this, the prudential regulatory framework in the EU and the nine Member States was evaluated to be materially non-compliant with the minimum standards prescribed under the Basel framework.”

However, how bad is it?

Having skimmed trough the report with a focus on the definition on capital, I noticed that the assessment team is mild. Yes, there are instances of a lack of compliance, but many of them are not really material. That is, except for the part on holdings in insurance companies.

But Europe even takes care of that part with a tough rule on conglomerate capital, see this link, to which the RCAP assessment report refers.

I think the mild verdict can be justified by the teams that worked on the definition of capital over the years, in Basel and in Europe. The quality of the rules produced by these teams is outstanding, for which they now appear to receive credit.