Banks may need start increasing their capital reserve to offset off-balance sheet activities. For banks operating on Standardized Approach, there may be an improvement in Risk Weighted Assets (RWA) if their books have a lower Loan-to-Value (LTV). With simplification of calculations for Standardized Approach, there will be significant benefits for banks operating on this approach.
There is some significant impact to banks operating on Internal Ratings Based approach (IRB). With the introduction of capital floors and the removal of scaling factor, there would be a reduction in CET1 (Common Equity Tier 1) ratios which will then have direct impact on Pillar 1 Capital Requirements.