ECB Keeps Strict Capital Requirements for European Banks
Banking supervisor rejects easing post-crisis rules to prevent underestimating financial risks.
European Central Bank banking supervisor Pedro Machado stated that capital safeguards established after the 2008 crisis remain unchanged. The authority rejected requests from the banking sector to lower minimum capital requirements in the name of bureaucratic simplification.
The debate comes as European institutions seek greater competitiveness against American rivals. The ECB defends maintaining the minimum capital threshold as a necessary barrier to prevent internal models from underestimating the actual risks of operations.
Machado highlighted that there is no solid evidence that reducing capital requirements would bring real economic benefits. The authority's focus is to ensure that credit expansion does not occur with costs transferred to taxpayers in cases of bankruptcy.
The European Central Bank only maintains support for administrative relief measures aimed at smaller institutions. These actions aim to reduce supervisory burdens without compromising the global prudential standards established for the financial system.
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