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Risk-Based Capital Requirements

In 2010, the Basel Committee on Banking Supervision (BCBS) published Basel III, a comprehensive reform package which is designed to improve the quality and quantity of regulatory capital and to build additional capacity into the banking system to absorb losses in times of future market and economic stress.  Basel III introduces or enhances a number of capital standards, including a stricter definition of regulatory capital, a minimum tier 1 common equity ratio, the addition of a regulatory capital buffer, a leverage ratio, and a disclosure requirement for regulatory capital instruments.

In July 2013, the U.S. banking agencies issued the Final U.S. Basel III Rule to comprehensively revise the regulatory capital framework for the U.S. banking sector.  The Final U.S. Basel III Rule implements many aspects of the BCBS Basel III framework but it also incorporates a number of changes required by the Dodd-Frank Act.

REGULATORY MATERIALS

Basel Committee on Banking Supervision

 United States

 European Union