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EU Banks May Need Rescue Funds Equaling Twice ECB Capital

  • Single Resolution Board takes SREP capital as starting point
  • Capital to be refined as regulatory dust settles, Koenig says
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Why a Dovish ECB May Lessen Draghi's Buying Power

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The euro area’s biggest banks will be asked to earmark funds equivalent to more than twice their minimum capital requirements to make sure a possible emergency doesn’t cost taxpayers, according to Elke Koenig, head of the Single Resolution Board.

The Brussels-based SRB, the resolution authority for 142 banks including Deutsche Bank AG and BNP Paribas SA, will use the minimum capital requirement set by the European Central Bank as a proxy for funds that would be needed to absorb losses and allow recapitalization in a crisis, Koenig said in an interview this month. The ECB last year set an average requirement for the highest-quality capital of 9.9 percent of risk-weighted assets.