European banks need to cut 3.2trn euros in assets by 2018 in order to comply with the Basel III regulations.The largest financial institutions need to shed €661bn in assets and come up with €47bn in capital, while smaller banks would be required to remove €2.6trn from their balance sheets, according to a Financial Times report published on Sunday citing a Royal Bank of Scotland (RBS) analysis. The RBS report pointed to Deutsche Bank, Crédit Agricole and Barclays as the banks that have the largest need of increasing capital. According to FT, Europe's banking sector has total assets of €32trn and already cut their balance sheets by €2.9trn since May 2012. According to Reuters data based on European Central Bank information, banks closed 5,500 branches in the European Union last year. In 2011, 7,200 offices were shuttered. Since the start of the crisis, European banks have cut their branches by 8.0% or 20,000 total units. JM