Regulatory Alerts2010-10-08
Group of Governors and Heads of Supervision Announces Higher Global Minimum Capital Standards
The Group of Governors and Heads of Supervision at the Basel Committee on Banking Supervision announced a substantial strengthening of global banking capital standards and introduced new liquidity requirements to enhance financial stability. The reforms raise the minimum common equity requirement from 2% to 4.5%, mandate a 2.5% capital conservation buffer, and establish a countercyclical buffer ranging from 0% to 2.5%, bringing the total common equity target to 7%. These measures, supplemented by a non-risk-based leverage ratio and phased implementation beginning in 2013, aim to ensure banks can withstand economic stress while supporting long-term growth.
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