9.1%
8
92%
8.0% 91%
440
97%
96%
94%
6.2%
4.0%
220
3.3%
00
91%
96%
94%
97%
72%
0.92%
7.0% 6.3%
2
0.64%
0.61%
GLOBAL financial DEVELOPMENT REPORT 2013
Remaining core Tier 1 ratio (%) Deduction items according to BCBS proposal (%)
Remaining core Tier 1 ratio (%) Deduction items according to BCBS proposal (%)
6
9.5%
4
ra Cor tio e , c Tie ur A r 1 re L nt L an L d t at D i he n eAd Ca muct rib eriion be cas an Cme EIunro c anrtr rpeea keal san t ARs e di M Wia n Ba id se dle A Nol II Ea I ra rthcor st a tio Afe nd , c ricTie ur a r 1 Cu re ea mualan East nt rn tdivP A ing eac sia s, reiftic 2 a S0o11 ine ut –1 d h A2 sia Ba se Srau l I tbio-S II co , 2ah re Af 01a2ran ric a
d t La t he in A Ca m AriLbb eric L ea a n an L d t at he in A Ca m A ribM eri biedd ca LL anle N E Ce Euro orth ast n t p e Af a n ra a ric d l A nd a s M idd C iaEu e ro l No e E a n tr p e rth st al A and Af and sia ric a a Ea E a n a s n d P st A d P t A ac sia ac sia ific ifi cS ou So th ut h A As sia ia Su bSu Sa bh Sa h a Af a ra n Af ran ric a ric a
s t a t e a s r e g u l a t o r a n d s u p e r v i s o r
92%
90%
8.2% 7.6%
0
AL L d t La t he in A Ca m rib eri b e ca an E C ur
9.4%
72%
68 t h0e
7.58%
660
10.1%
90%
880
6%
9%
an
Su b
-S ah Af a ra n ric a
3.3%
8%
28%
an
10%
20 80 15 60 10 40 5 20 0
Core Tie New Ba
Box 2.5 Impact of the Basel III Implementation in Developing Economies (continued)
10 6 8 4 6 2 4
9.1%
9.5%
8.2% 7.6%
10.0% 9.0%
10.6% 9.5%
8.2% 7.6% 7.2%
7.0% 6.3%
0.92%
8.3% 7.9% 7.4%
0.64%
0.61%
ra Cor tio e T A,Lcur ier an L L ren 1 d t at t he in A Ca m De rib eri du be ca ct ion an s Ce Euro nt pe I ra m a nc l A a nd re siarke as M tR ei idd W n A No lBeaEsa rth esl t Af IIaI ncd rraic or tiao e , c Tie anCuEas urre r 1 m t d ea PaulaAs nt rn ci tivia in fic e So gs, 2 ret ut 01 ain h A 1 ed sia –12 Su Ba b- se Sa ra l II ht I Af ariaon, 2 core ric 01 a 2
02
10.6%
0
Core Tier 1 ratio Basel III core ratio, 2010 New Basel III core ratio, 2012 e. NSFR vs. share of wholesale funding
80
90
300
ut
East Asia and Pacific Loan to deposit ratio Middle East and North Africa Europe and Central South Asia East Asia and PacificAsia Middle East and North Africa Latin America and the Caribbean Sub-Saharan Europe and Central Asia South Asia Africa Latin America and the Caribbean Sub-Saharan Africa an
So
10.9% 10.7% 9.8%
60 0 40 20 0
Core Tier 1 ratio Basel III core ratio, 2010 New Basel III core ratio, 2012
f. NSFR vs. loan to deposit ratio
Ce Euro nt pe ra a l A nd sia
hA
sia L d t at he in A Ca m rib eri be ca an
Percent Net stable funding ratio 160 180 Net stable funding ratio (%) 160 140 180 140160 120 120 140 100 100120 8080100 60 60 80 40 4020 60 40 20 0 20 0 10 20 30 40 50 60 70 0 0 Share of wholesale funding in200 total funding 0 50 100 150 250 an Eas dP tA ac sia ifi c M idd l e No Ea rth st Af and ric a Su bSa h Af aran ric a
Ce Euro nt pe ra a l A nd sia
Ba se ra l III tio co , 2 re 01 2
8.22%
8.22% 10.9% 10.7% 9.8%
d. Net stable funding ratio (available stable Percent 12 funding/required stable funding) 11.3% 10.6% 10.6% Percent 10.0% 9.5% 10 9.1% 9.5% 9.0% 160 8.3% 7.9% 8.2% 8.2% 7.6% 7.6% 8 7.4% 7.2% 7.0% 140 6.3% 6 120 4 100 80 2
an Eas dP tA ac sia AL ifi an L c M d t Lat idd i h n eC A l e No Ea ar me ibb ric rth st ea a Af and n ric a E u Ce ro Su nt pe bra a Sa l A nd h sia M Af aran idd ric a No le Ea rth st So Af a n d ut ric hA a sia E an as an L dP tA d t at ac sia he in A ifi Ca m c rib eri S o c be a u t an hA sia Ce Euro Su nt pe b -S ra a ah l A nd sia Af aran ric a
c. Current and adjusted core tier 1 ratios Percent 10 Percent 9.11% 12 8 11.3% 7.58%
risk adjustments would lower the core tier 1 ratio by about 1–3 percentage points on average. The overall impact on the core tier 1 ratio is the largest for LAC, Middle East and North Africa (MENA), and ECA regions, but most banks in the latter two regions still pass the required 7 percent level comfortably after the adjustments. There is also wide variation in banks’ ability to meet the required 100 percent level for the net stable funding ratio (NSFR). The calculations suggest that the NSFR may have varying degrees of impact on EMDEs across regions, with wide variations within a given region. The ECA and LAC regions seem to be the most vulnerable to the NSFR, where dependence on wholesale funding (ECA, given the high
Net stable funding ratio (%) 180 160 140 120 100 80 60 40 20 0 0 50 100
150
200
250
300
Loan to deposit ratio East Asia and Pacific Middle East and North Africa Europe and Central Asia South Asia Latin America and the Caribbean Sub-Saharan Africa
dependence on parent funding and underdeveloped local capital markets) or loan-to-deposit ratios are high (ECA and some LAC countries). However, other factors may also affect the level of NSFR (for example, low levels of government securities in asset portfolios may result in low NSFRs). Moreover, further challenges may be ahead in meeting the NSFR requirement: for example, upcoming rollover needs of European banks and sovereigns may raise the cost of term funding that may spill over to EMDEs and result in competition for deposits. There are also challenges associated with holding high levels of (liquid) government securities; this would help in meeting the NSFR target but expose the bank to higher sovereign risk.
Source: World Bank staff calculations based on Bankscope data for 127 banks in 42 countries.
Net stable funding ratio 180 160 140 120 100 80 60 40 20 0 0 50
East Asia and Pacific Europe and Central A Latin America and th