Output floor cliff edge effects threaten EU banks
Capital measure to have uneven impact across five-year phase-in
The phase-in of the output floor on modelled capital requirements set by the Basel Committee may cause a sudden jump to top banks’ minimum charges in 2027, the last year of the transition.
The Basel III reform package mandates a five-year transitional period for implementing the output floor. The floor will be set at 50% of standardised capital requirements in 2023 and gradually move up to the
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