Reducing State Participation in Commercial Bank Capital: Implications for Lending Efficiency

The globalization of the world economy and the growing intensity of competition among banks, both internationally and domestically, have made the issue of strengthening banks’ capitalization increasingly important. Capital serves as the primary financial safeguard against unexpected losses and as the foundation for establishing sound asset management standards. Following the global financial and economic crisis, even though this issue has received considerable attention, many challenges remain. For instance, the International Basel Committee has raised the capital conservation buffer from 1.8% to 2.5% by 2024, the core capital requirement from 6.3% to 7.0%, and the total capital ratio from 9.8% to 10.5%. This, together with the need to cover billions of euros in potential losses, underscores the gravity of the problem.