Nine eurozone banks saw their capital buffers fall below the European Central Bank’s minimum capital requirements in 2020, taking advantage of temporary measures designed to support lending during the Covid-19 pandemic. Under the temporary rules, the ECB will allow banks to operate with capital levels below its usual capital requirements until the end of 2022, alongside other measures. The ECB did not name the banks.
Commenting on results of the ECB’s 2020 Supervisory Review and Evaluation Process (SREP), Andrea Enria, head of supervision at the ECB, said: “Since the third quarter of 2020, banks under our supervision have been well capitalised. Only a few banks have dipped into their buffers so far.” The common equity tier 1 (CET1) ratio – a key measure of balance sheet strength – across eurozone banks directly supervised by the ECB reached an all-time high of 15.2% in the third quarter 2020.
