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Banks Get More Capital Relief as ECB Wants Stimulus to Work

  • ECB to allow flexibility on leverage ratio until June
  • Bankers have called for such relief to be made permanent
Euro Bears Push Back Ahead Of ECB Virtual Rate Announcement
Photographer: Alex Kraus/Bloomberg
Updated on

The European Central Bank offered lenders a fourth round of regulatory relief to help massive stimulus efforts feed through to a virus-stricken economy.

Banks will be temporarily allowed to tweak the math behind a financial strength metric known as the leverage ratio to their benefit by stripping out deposits held at central banks, the ECB said in a statement on Thursday. With a looser leverage ratio for the next nine months, banks will be able to make more loans with less capital.