Jay, the EBA and BCBS Basel III monitoring results are out!
Highlights from the EBA report:
CET1 ratios are steadily increasing – Compared with the previous exercise (reference date June 2014), the average CET1 ratio of Group 1 banks increased by 0.5 percentage points:
Capital shortfalls are on the decrease:
Although the press worries about AT1 CoCos, the amount of Tier 1 appears limited, but Tier 2 is on the rise.
The leverage increase increases too – Group 1 banks show a LR of 4.2%, while the ratio for Group 2 banks is 5.0% as of December 2014. As of 31 December 2014, approximately 90% of both Group 1 and Group 2 banks would fulfil the preliminary target LR requirement of 3.0%.
But … the Leverage Ratio remains a constraint:
In particular for G-SIBs: