20211109_LargeModelST
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Benefits of EU-specific versus plain vanilla Basel III<br />
Growth-at-Risk for GDP y-o-y<br />
• In a longer perspective (9-10 year after the<br />
reform) the plain vanilla Basel III<br />
implementation translates into a<br />
permanent shift in GaR by around 0.1pp<br />
starting<br />
• The long-run benefits of the main EU<br />
approach are around 40% below the<br />
benefits under the plain vanilla<br />
implementation<br />
Legend: The difference between the annual euro area GDP growth with versus without Basel III implementation in the 10 th<br />
percentile of the corresponding output growth distributions. Note that the type of the scenario assumed for the first three years<br />
following the introduction of the Basel III implementation (i.e. pre-Covid-19 or Covid-19) does not affect this long-term estimate.<br />
Source: Budnik et a (2021) Macroeconomic impact of Basel III finalisation in the euro area<br />
• The benefits from the EU parallel stacks<br />
are only a fraction (one-fourth) of the longterm<br />
gains under the plain vanilla<br />
implementation<br />
33<br />
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