This “supplement” to the bank leverage ratio requirement, which measures a bank’s core capital as a percentage of its total assets, was applied to twice as many banks as last year and represented between 10 and 40 basis points.
This is the most notable fact in the ECB’s annual assessment of the 113 banks under its supervision, which it judged overall to be well endowed with capital and liquidity.
“On average, banks have maintained strong capital and liquidity positions, well beyond regulatory requirements,” the ECB said.
Next year, the ECB will focus its supervisory work on risks linked to geopolitical changes and a less dynamic economy.
“The weakening macroeconomic outlook and structural changes in the economy call for increased vigilance,” the ECB said in a press release.
“Geopolitical risks are often not priced in financial markets before they materialize, which can lead to abrupt reassessment of risks, potentially increasing liquidity risks and leading to additional losses.”
(Written by Francesco Canepa, French version Bertrand De Meyer, edited by Blandine Hénault)
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