- ECB requires banks to hold marginally more capital in 2022
- Says SREP results show banks have solid capital and liquidity positions, with scores broadly stable
- Overall capital requirements and guidance increase marginally to stand at 15.1% of risk-weighed assets in 2022
- That is up from 14.9% in 2021
- But assessment of business models show that most banks are still failing to generate returns that exceed cost of capital
On the change, the ECB notes that:
"The capital space that we created for banks at the onset of the pandemic helped them to continue lending to households and businesses. Today we are providing clarity on the path back to normality. We are confirming the initially envisaged timeline for a return to normal supervision of banks’ capital adequacy and leverage."
The full release can be found here.