ECB says six banks are running out of capital, phasing out pandemic waiver

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Workers hold up the huge Euro logo outside the headquarters of the European Central Bank (ECB) in Frankfurt, December 6, 2011. REUTERS/Ralph Orlowski

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FRANKFURT, Feb 10 (Reuters) – Six eurozone banks failed to meet capital demands from the European Central Bank, but the sector as a whole coped well with the pandemic and relief measures could be phased out by the end of the year, according to the ECB said Thursday after its annual review.

The ECB did not name the six banks whose capital levels at the end of the third quarter were below supervisors’ total requirements, made up of mandatory capital requirements, discretionary “advice” and additional buffers.

But his chief supervisor, Andrea Enria, said he was happy with the banks’ performance during the coronavirus outbreak.

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“We are overall happy with how banks have operated so far during the pandemic,” he said. “Banks need to remain aware of the possible impact on their balance sheets and strengthen their risk control and governance frameworks in particular.”

The ECB added in a report that banks’ scores in the review were “broadly stable, with significant institutions maintaining strong capital and liquidity positions” and most banks exceeding their requirements.

Enria also said a waiver allowing banks to tap into some of their capital buffers, introduced at the start of the pandemic in 2020, would be phased out at the end of this year, as widely expected.

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Reporting by Francesco Canepa Editing by Balazs Koranyi and Toby Chopra

Our standards: The Thomson Reuters Trust Principles.

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