Why German banks took a stand against Basel capital floors

By Deutsche Bank's own calculations, its risk-weighted assets equal just 28% of its balance sheet

Germany is on the warpath against a proposed global standard for how banks calculate the capital they need: Its largest lenders rank among the worst when it comes to how they assess risk. 

That means

 

AG and Commerzbank AG will be affected more than most big lenders and may have to raise additional capital if the Basel Committee on Banking Supervision implements a proposed floor for how much their risk-weighting of assets can veer from standardised measures. 

By Deutsche Bank’s own calculations, its risk-weighted assets equal just 28 per cent of its balance sheet, compared with 50% for the six largest US banks. Global banking regulators on Tuesday postponed the approval of long-awaited rules designed to avert a repeat of the financial crisis, after failing to agree on the minimum amount of capital banks must hold. 

Here is why banks are opposing Basel rules: