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Regulation should not squeeze life out of euro zone banks: ECB's Nouy
January 18, 2017 / 11:02 AM / a year ago

Regulation should not squeeze life out of euro zone banks: ECB's Nouy

FRANKFURT, Jan 18 (Reuters) - New European rules to prevent a repeat of the 2008 financial crisis should not “squeeze the life out banks” but rather stop them from taking on too much risk, the European Central Bank’s top bank supervisor said on Wednesday.

The ECB is in charge of applying those rules for the large banks it supervises.

“It goes without saying that the rules must not be so tight as to squeeze the life out of banks,” Daniele Nouy said in Koblenz, Germany.

“They should rather provide a strong framework that reins in excessive risk-taking, while allowing the market to function normally. And this is what has been achieved,” she added.

Addressing another widespread complaint among bankers, the chairwoman of the ECB’s supervisory board also said low central bank rates would take their toll on bank profits at some point. (Reporting By Francesco Canepa; Editing by Balazs Koranyi)

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