The figure represents a 23% increase relative to these institutions’ aggregate common equity of $2.5trn (£1.58trn).
Although Basel III will not be fully implemented until end-2018, banks face both market and supervisory pressures to meet these targets earlier, said the ratings agency.
The report said that banks are likely to pursue a mix of strategies to address capital shortfalls, including retention of future earnings and equity issuance.
Fitch said that banks’ deleveraging in preparation for Basel III will likely affect credit markets and the financial system more broadly.
“Since Basel applies relatively higher capital charges to riskier activities, institutions are likely to focus on reducing their exposure to lower rated and more volatile sectors.
“Higher Basel III capital charges could result in increased borrowing costs, diminished availability of credit, reduced asset liquidity, a shift to securitisation and capital markets funding, or cause a migration to less regulated segments of the financial system, including ’shadow banks’,” said Fitch.
The UK banks on the list of 29 financial instituitons, which as a group represent $47trn in total assets, include HSBC, Barclays, Lloyds Banking Group and Royal Bank of Scotland.
