European Banks Gain Reprieve as ECB Retreats on Capital
- Capital demands reach `steady state' on level set this year
- Supervisors to cut Pillar 2 demands to offset rising buffers
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Euro-area banks won a reprieve from regulators’ post-crisis steps to pile on capital requirements after the European Central Bank said it would curtail its own demands on individual lenders.
The ECB, which oversees lenders including Deutsche Bank AG and Societe Generale SA, will trim its demands for capital at the same pace as another buffer is phased in over the coming four years, Korbinian Ibel, the ECB’s director-general for micro-prudential supervision, told journalists on Friday. The ECB will expect banks to ensure they have common equity capital equivalent to about 10 percent on average of risk-weighted assets, he said.