In this context, higher capital requirements mean both, a higher quantity of capital as well as a higher quality. Particularly, the minimum core capital requirements will rise from currently 2% to then 4.5%, plus an extra 2.5% that will be introduced in stages from 2016 on. Tier 1 capital requirements will increase from currently 4% to then 8.5%.
Furthermore, a stricter definition of core capital is to be implemented. Yet, this first line of defence is not sufficient and needs to be supplemented. In market-based economies the failure of individual enterprises, including banks, should not be ruled out a priori.