That said, in the other direction, banks benefit from lower wholesale funding costs and the improved ability of customers and sovereigns to service existing debts, while also booking capital gains on holdings of fixed-income securities.
In comparison to Brazil, for example, the use of internal models for calculating riskweighted assets and thus capital requirements is widespread in Europe. Consequently, any changes to this approach – as currently discussed – have much stronger implications for European banks than for their counterparts elsewhere.