European banks see rise in risk-weighted assets

04/3/2012 | Risk.net (subscription required)

The risk-weighted assets at 10 European banks increased a combined total of €200 billion after the 31 Dec. introduction of Basel 2.5 rules, according to the companies' disclosures. The jump came weeks after the European Banking Authority notified lenders they would need to reach a Tier 1 capital ratio of 9% by the end of June. "Banks are being squeezed badly here -- the quality requirements for Tier 1 capital are higher than they used to be, the amount of RWAs is going up because of the capital charges in Basel 2.5, and on top of that the capital requirements are moving up as well," one expert said.

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