Banks Catch a Break With ECB Easing Post-Crisis Demands
- Lenders for now will be able to dip into their capital buffers
- ‘Coronavirus is proving to be a significant shock,’ Enria says
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The European Central Bank freed banks to put some of their financial cushions to work, a key plank in its effort to counter the economic damage from the coronavirus.
Lenders will be permitted temporarily to operate with less capital than the watchdog usually demands and also use types of subordinated debt to help meet their requirements, the ECB said Thursday, enacting measures the banks had sought. The central bank’s other steps to pump more money into the economy included more asset purchases and some loans at negative interest rates.