March 18, 2020 / 9:10 AM / 12 days ago

German regulators slash capital requirements to boost bank lending

BERLIN, March 18 (Reuters) - Germany’s banking regulator BaFin said it would cut the anti-cyclical capital buffer banks are obliged to maintain to 0% from April 1 in order to boost lending to the economy during the coronavirus crisis. The buffer requirement is now 0.25%.

BaFin and the Finance Ministry said in a statement that the German banking system was well capitalised and experiencing no liquidity bottlenecks which meant buffers built up over recent years could now be put to good use.

“In the past week, events linked to the spread of the coronavirus have moved fast,” they said on Wednesday. “These preventive measures will strengthen the ability of the German banking sector to lend.”

The cut to the buffer, which BaFin said would remain in place until at least the end of 2020, should give banks a capital boost of around 5 billion euros ($5.48 billion). ($1 = 0.9123 euros) (Reporting by Thomas Escritt, editing by Scot W. Stevenson)

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