A new regulatory package, called the Final Basel III Framework, can have significant negative effects on the real-economy. The higher levels of required capital will increase the borrowing costs for European households and businesses of some 0.12-0.16 percentage points, corresponding to a price increase of 5-7%.

We find this could lead to a permanent reduction in GDP of around 0.5%. In contrast, with the level of recapitalisation that EU banks have achieved since the crisis, any additional layer of capital adds only insignificant improvements to the financial stability.

Learn more about the study

Read more on EBF’s website
Read more on New York Times
Read more on CNBC
Read more on The Telegraph
Read more on Bloomberg
Read more on US News 
Read more on Reuters UK
Read more on Finans Danmark

For further information, please contact Jonas Bjarke Jensen