The largest global banks cut the shortfall in the reservesthey'll need to meet Basel capital rules by 82.9 billion euros($112 billion) in the second half of 2012, leaving a gap of 115billion euros.

“Shortfalls in the risk-based capital of large internationallyactive banks continue to shrink,” the Basel Committee on BankingSupervision said in a statement on its website. The capital gapnarrowed by about 42 percent at the end of 2012 compared with themiddle of last year, the group said. The requirements, known asBasel III, are scheduled to fully phase in by 2019.

Lenders also need to do further work to meet a planned bindinglimit on bank indebtedness, known as a leverage ratio, the Baselgroup said. A quarter of large global banks failed to meet thestandard, it said.