ECB's Nouy Says EU Is Repeating Crisis Mistakes in Capital Rules

The European Union’s overhaul of bank capital rules show it’s forgetting some of the lessons of the financial crisis, according to Daniele Nouy, head of the European Central Bank’s supervisory arm.

Nouy pointed to a provision in the draft legislation that would stop the ECB requiring banks to meet firm-specific capital requirements using only the highest-quality capital, known as common equity Tier 1. Banks would be able to count some additional Tier 1 capital toward these requirements, an allowance Nouy said was unwise. The upside for the banks is that selling such instruments can be cheaper than raising money from shareholders.