Basel III Risk-Based Capital Ratios Rise as Leverage and Funding Ratios Stay Stable
The latest Basel III monitoring exercise shows that large internationally active banks (Group 1) increased their risk-based capital ratios in the second half of 2024, while leverage and liquidity funding metrics remained broadly stable. The results, based on data as of 31 December 2024, underline the continued strengthening of bank capital positions under the Basel III framework.
According to the Basel Committee on Banking Supervision, the average Common Equity Tier 1 (CET1) ratio for Group 1 banks rose from 13.4% at end-June 2024 to 14.0% at year-end, reflecting continued capital resilience. Under the fully phased-in final Basel III framework (effective 2028), the CET1 ratio would stand at 13.4% compared with 13.0% six months earlier. The Tier 1 minimum required capital (MRC) increased by 2.1% at the target level, up from 1.8% at mid-year.
Takeaway
Stable Leverage and Liquidity Positions
The leverage ratio for Group 1 banks remained stable at 6.2%, slightly up from 6.1% in June 2024. Similarly, liquidity metrics indicated broad resilience: the Net Stable Funding Ratio (NSFR) held steady at 123.7%, and all banks reported levels above the 100% minimum requirement.
However, the Liquidity Coverage Ratio (LCR) decreased slightly to 134.8% from 135.9% in the previous reporting period. Three Group 1 banks fell below the regulatory minimum of 100%, marking a small deterioration in short-term liquidity buffers despite overall soundness across the sample.
Takeaway
Capital Strength and Risk Absorption Capacity
Group 1 banks reported no capital shortfalls under the current , compared to a €0.9 billion shortfall at mid-2024. Under transitional rules, all banks continue to meet , with improved buffers under the Total Loss-Absorbing Capacity (TLAC) framework. The TLAC shortfall at the 2022 minimum rose modestly from €7.3 billion to €8.8 billion, reflecting normal adjustments as institutions optimize balance sheet structures.
Total accounting assets for Group 1 banks declined from €83.5 trillion to €67.1 trillion, reflecting balance sheet normalization and across the sample. These figures confirm that large banks have maintained strong positions despite a challenging global environment.
Takeaway
Enhanced Data and Dashboards
The Basel Committee also introduced new interactive Tableau dashboards accompanying the report. These visual tools enable users to explore data across jurisdictions, visualize trends in risk-based capital, liquidity, and leverage metrics, and—new this year—download the underlying datasets directly for further analysis.
The dashboards include expanded explanatory text, deeper insights into risk-weighted assets (RWAs) and operational risk, and improved cross-jurisdiction comparability. These enhancements aim to increase transparency and accessibility for regulators, analysts, and market participants alike.
Takeaway
Background
The Basel III monitoring exercise evaluates the impact of global regulatory standards on bank capital and liquidity adequacy. The Group 1 sample includes 116 large, above €3 billion, including 29 global systemically significant banks (G-SIBs). The Group 2 sample covers 59 smaller or non-international banks.
The results reflect current jurisdictional implementation as of December 2024 and model the effects of the fully phased-in Basel III framework (2028) without transitional adjustments. These findings serve as key indicators for supervisors and market participants to track the global banking system’s health and readiness under .
