November 25, 2019 / 7:00 PM / 18 days ago

EU should keep its promise of not asking banks for even more capital - ECB

FILE PHOTO: Sign of the European Central Bank (ECB) is seen ahead of a news conference on the outcome of the Governing Council meeting, outside the ECB headquarters in Frankfurt, Germany, March 7, 2019. REUTERS/Kai Pfaffenbach

FRANKFURT (Reuters) - European regulators should fully implement a reform package that will force banks to hold more capital but then must keep their promise of not asking for even bigger buffers, European Central Bank supervisor Yves Mersch said on Monday.

“Stabilising the capital requirements is a reasonable objective asked for by banks, but we need to finalise the Basel III package first,” said Mersch, referring to agreement on bank regulation.

“Fully implementing Basel III will have a positive effect on the economy in the long run. At the same time, we should not breach our promise of no further capital requirements on aggregate,” said Mersch, who also sits on the ECB’s Executive Board.

Under the Basel III reform package, capital demands for EU banks will increase by around 24% on average, above the increase required for U.S. banks.

Reporting by Balazs Koranyi; Editing by Chris Reese

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