Anew set of rules governing capital adequacy of banks debuted this year, and Japanese banks, many of whom close their books in March, became the world's first to announce their earnings results under the new standards.
Thanks to Japan's continuing economic expansion and the recovery in the stock market, the capital-to-asset ratios of major Japanese banks are now in a range between 11 percent and 13 percent, under "Basel II: A revised framework — Comprehensive version."
Its predecessor, Basel I, was endorsed in 1988 and required banks with international operations to keep capital-to-asset ratios higher than 8 percent. It was designed to establish an internationally unified standard for assessing their financial health in the wake of a string of bank failures caused by currency exchange losses and sovereign crises in some Latin American countries.