The Financial Times published an article on 18th May 2012 and it discussed the cost to the 29 largest banks in the world, in order for them to comply with the Basel III rules. The article entitled “Fitch calculates $566 billion need for Basel III rules” and details the fact that Fitch Ratings suggest these banks would need to raise an additional $566 billion in new capital or shed about $5.5 trillion in assets by 2018 in order for them to meet the more stringent Basel III bank capital standards. These figures are the first attempt to measure the impact of the Basel III bank reforms for the financial markets.
Jacqui Hatfield, a partner at Reed Smith, commented in the article saying that “Higher capital requirements will affect profitability and stakeholders need to understand this and not expect the returns on equity to be the same. It is a downside to the requirements but the upside is that it should make the financial industry sector safe.”