The Impact of the Implementation of the Basel III recommendations on the capital of Portuguese banks
Abstract
using the standard method, in Portugal. For our study, we used the annual reports of 31st of December
of 2012, and found out that out of the fourteen banks that published annual reports, only six satisfied
the minimum ratios laid out by BCBS. Till 2012, Portuguese banks used an internal ratings method
based on the Basel II recommendations known as notice 6/2010 of the Portuguese central bank, Banco
de Portugal. As the implementation of the recommendations of Basel III in the EU via the Credit Review
Directive IV is scheduled for 2014 and later years, Portuguese banks may severely contract credit upon
implementation, as that is the easiest, fastest and cheapest way for banks to satisfy the minimum ratio
requirements as compared to an increase of capital or credit spreads.
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