Capital Requirements (Basel III) (Directive)
Additional own funds buffers are to strengthen the banking sector’s resistance to losses and to smooth credit lending to economic cycles. The introduction of a binding leverage ratio and stricter liquidity requirements is to be examined. Infringements of rules are to be subjected to EU-wide sanctions.
Stricter capital requirements reduce the likelihood of banks having to take state recapitalization measures. They must, however, be complemented by a reliable insolvency statute. The countercyclical capital buffer is problematic in many ways. Investments in state bonds must be hedged by own funds. If the Basel capital requirements are implemented by the EU only, the quality of Europe as a business location would be weakened without strengthening the stability of the financial market.