The average Tier 1 capital ratio of Indian banks is around 10% with more than 85% of it comprising common equity. The regulatory adjustments will reduce the available equity capital only marginally for various reasons. First, items such as goodwill, Deferred Tax Assets (DTAs) etc. are already deducted from Tier 1 capital for Indian banks.
It will help make global financial markets safer by ensuring that global banks and banks with cross-border activities have to comply with a common framework of minimum capital, liquidity and risk management standards. The crisis clearly showed that supervision should not stop at national borders.