October 15, 2018 / 8:29 AM / 10 months ago

Banks not making enough progress in raising loss-absorbing capital - EBA

BRUSSELS, Oct 15 (Reuters) - Euro zone banks have not made enough progress in raising loss-absorbing capital and now may face more difficult market conditions due to higher volatility and widening spreads in sovereign yields, the bloc’s banking watchdog said on Monday.

“Not enough progress has been made there,” European Banking Authority’s chair Andrea Enria told a banking conference in Brussels, warning that the problem concerned large and medium banks, but not the biggest systemic lenders who are instead “very close to be fully complaint.”

Under international and EU banking rules, major banks must issue a special loss-absorbing debt known as TLAC that can be converted to capital if a crisis burns through their core capital buffer. (Reporting by Francesco Guarascio)

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