20211109_LargeModelST

Debt funding costs after transition
Effect on wholesale funding costs across multiple
economic scenarios
Effect on liability structure
Source: Budnik et al (2021) The growth-at-risk perspective on the system-wide impact of Basel III finalization in the euro area
• The marginal effect of additional 1% of capital (compared to assets) on wholesale funding costs is 10bp
in the median, but becomes more substantial in adverse scenarios (25bp in 5% most adverse scenarios)
• Adopting the Basel III package reduces banks’ demand for wholesale funding (reflecting increasing role
of own funds on the liability side of banks’ balance sheets)
27
www.ecb.europa.eu ©