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EU regulators may ease demands for banks

Brussels, February 12, 2012

European banking regulators may ease demands on capital buffers for banks should a recent drop in sovereign debt yields prove lasting, Italian daily Corriere della Sera quoted European Banking Authority (EBA) chairman Andrea Enria as saying.

The EBA has asked European banks to boost their capital base by a combined 115 billion euros ($152 billion).

As part of an exercise to assess the banks' capital solidity, regulators asked lenders to mark to market certain key assets, including sovereign bonds, on September 30.

Since then, sovereign bond yields of troubled euro zone peripheral countries have fallen, boosting the value of these sovereign debt portfolios at current prices and potentially reducing the banks' need for a capital buffer.

'If we see that the ongoing narrowing of sovereign debt spreads is of structural and lasting nature, we could consider reviewing the sovereign buffer,' Enria said.

'If we do not see further shocks from Greece or other risks to stability, we could start discussing these issues,' Enria said with regards to a possible review of the capital buffer criteria.-Reuters




Tags: EU | Bank | regulator | demands |

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