Frankfurt The ECB’s banking supervisory authorities are making further relief for money houses in the euro area due to the corona crisis. The capital guards to hedge against market risks would be temporarily reduced, the bank guards announced on Thursday in Frankfurt. This decision is said to respond to the significant price fluctuations on the stock exchanges since the virus outbreak.
Among other things, this should ensure that the institutions continue to provide market liquidity and act as market makers on the stock exchanges. The European Central Bank (ECB) has been responsible for the control of large banks in the currency area since autumn 2014. It currently monitors 115 money houses, including the Commerzbank and the Deutsche Bank.
The ECB’s banking regulator plans to review the move after six months. You and the other European supervisors had already given the financial institutions a variety of facilities in the past few weeks. Among other things, you want to ensure that credit flow in the economy is supported in times of crisis.
For example, banks can make full use of the capital and liquidity buffers. In addition, capital instruments that have not yet been recognized as core capital can also be used to meet capital requirements (P2R) in the future. The European bank stress test planned for this year has also been postponed to 2021.