Basel III output floor set to bind 25% of large banks

Risk-based capital requirements would constrain the largest share of international lenders

A fourth of large international banks are set to be constrained by the Basel III output floor on internally modelled capital requirements by the time the new regulatory framework is fully phased in in 2028, figures from the Basel Committee for Banking Supervision (BCBS) shows.

The latest Basel III monitoring report reveals the output floor – which bars banks from reducing their modelled capital requirements below 72.5% of the amount generated by the revised standardised approach – will set the