Banks’ 2016 annual reports revealed that cumulated Common Equity Tier 1 (CET1) requirements for global systemically important banks (G-SIBs) for 2017 are on average higher in the euro area than in the US.
On average, the 8 euro-area G-SIBs are required to meet, on a consolidated basis, a phased-in CET1 ratio of at least 8.3% (excluding the Pillar 2 Guidance, P2G, which is not public) against 7% for the 8 US G-SIBs. The aggregate CET1 demand includes the minimum Pillar 1 requirement (4.5%), the capital conservation buffer (1.25%), the G-SIB buffer (0.75% in average in the euro area against 1.25% in the US) and, for euro area banks only, the Pillar 2 Requirement (P2R, 1.8%) set by the ECB as the outcome of the 2016 Supervisory Review and Evaluation Process (SREP). The overall CET1 requirement for 2017 for all banks which are under direct supervision of the ECB (SSM) stands à 8.3% excluding the P2G and 10.4% including the P2G.
by Céline CHOULET