Basel 2.5 caused €200 billion jump in RWAs

European banks saw their RWAs leap at the turn of the year, as new trading book rules collided with the EBA's call to achieve a 9% capital minimum

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The introduction of Basel 2.5 on December 31 last year saw risk-weighted assets (RWAs) at 10 European banks leap by a combined €200 billion, according to disclosures in fourth-quarter and full-year reports – an increase that came just weeks after the European Banking Authority told banks they would need to temporarily achieve a 9% core Tier I capital ratio by the end of June this year.

"Banks are being squeezed badly here – the quality requirements for Tier I capital are higher than they used to

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