Basel Committee has unveiled the full text of the Basel III rules for banking, revealing that banks would have been €577bn (£489.2bn) short of capital had the rules applied in 2009.
In addition, banks are lacking €1,730bn in liquid assets that they will have four years to build up to comply with the new requirements.
The rules give banks until 2015 to meet liquidity obligations and until 2018 to meet capital ratio requirements.
The new regulations stipulate that banks maintain a core tier one capital ratio 4.5 per cent minimum, plus a 2.5 per cent capital conservation buffer during certain periods of the economic cycle.
The committee said that the liquidity requirements could be subject to change if they generate “unintended consequences” during the next few years, seen as an “observation period”.
PricewaterhouseCoopers’ Richard Barfield says that the liquidity rules will be tougher to comply with: “Competition for the limited supply of [liquid] retail deposits and medium-term funding will be fierce,” he said.
The publication ends months of uncertainty about the details of regulatory changes to the world’s banking system.