January 13, 2014 - Regulators have made a number of concessions in regard to the Basel III capital adequacy regime, which seeks to rein in the reliance many banking institutions have on debt.

The changes, announced in Basel, Switzerland, have come about after months of fierce lobbying from major banking institutions.

Central bankers and supervisors approved an international standard for the leverage ratios, offering some concessions to banks, which means they will not need to raise billions in extra capital.

Daniel Davies, an analyst at Exane BNP Paribas, told the 'Financial Times' that the result was "more of a win for the industry than I was expecting".

The relief to lenders may be temporary, as the regulators have indicated that there is still no concrete agreement on the final level of the new leverage coverage ratio (LCR), which measures how much capital a bank must hold against its loans and other assets.

The LCR standard is a crucial part of the Basel III banking reform package, which is due to come nto full effect until 2019. The LCR wil impact the amount of lending funds and trade finance available to corporates and the real economy from banks so further updates have been keenly awaited.

Setting the minimum amount of capital banks must hold under Basel III has so far been fraught with the Basel Committe's proposal of a three per cent minimum for small banks and much more for systemtically important financial insttiutions (SIFIs), potenitally in conflict with some national regulators that want to go further, such as the UK with its post-Vickers' report recommendating double figures. Further debate can be expected.

What is definite, however, is that better assessments of bank's avaialble capital, and intra-day risk reporting on trading and balance positions, will be necessary and demand compliance technology investments in risk and reporting monitoring systems. Banks have been prioritising these technology investments in recent years in readiness for the new capital adequcy regime.