Factbox: Global bank capital rules nearer completion

LONDON Mon Jan 13, 2014 9:36am EST

LONDON (Reuters) - Central bank governors have eased elements of the Basel III accord, the world's core regulatory response to the 2007-09 financial crisis that saw taxpayers rescuing undercapitalized banks.

Implementation of Basel began in January 2013 and will be largely completed by the end of 2018, forcing lenders to hold three times the amount of capital they had before the crisis.

Regulators and investors are already putting pressure on big lenders to comply well ahead of the deadline.

The main elements of the accord are:

CAPITAL

* All banks must hold a minimum core capital buffer equivalent to 7 percent of their risk weighted assets by the end of 2018. The world's biggest 30 or so banks must also hold an extra 1 to 2.5 percent of capital from 2016 because of their size. Most major lenders already have buffers at or around 10 percent to demonstrate their financial health.

LEVERAGE RATIO

* A global rule to regulate leverage by forcing lenders to hold a minimum amount of capital in proportion to total assets on a non-risk weighted basis is coming in by 2018.

Regulators agreed on January 12 to ease how it is calculated and will now decide what the final ratio should be. Many countries want it higher than the 3 percent provisionally agreed and which most big lenders already meet.

LIQUIDITY

- Liquidity coverage ratio: Banks must hold a buffer of government bonds and cash to tide them over a month-long freeze in markets. The final version of the rule was eased slightly last year ahead of its introduction and many big lenders already comply;

- Net stable funding ratio: Banks must hold a buffer of bonds and other instruments with maturities of over a year. On Sunday regulators eased the plan and put it out to public consultation ahead of implementation in 2018.

(Reporting by Huw Jones; Editing by Giles Elgood)

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