Published by Global Banking & Finance Review®
Posted on December 17, 2024
2 min readLast updated: January 27, 2026
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The ECB has imposed extra capital charges on 13 euro zone banks due to leverage risks, affecting twice as many banks as last year.
FRANKFURT (Reuters) - The European Central Bank imposed additional capital charges on 13 euro zone banks this year, judging that they might be taking on more risk than they can absorb.
This "add-on" to the banks' leverage ratio requirement, which measures a bank's core capital as a percentage of its total assets, was applied to twice as many banks as last year and was worth between 10 and 40 basis points.
It was the single biggest change in the ECB-POLICY-3fdc7763-f2c0-4c30-b494-8614852eaf43>ECB's annual evaluation of the 113 banks on its watch, which it generally found well supplied with capital and cash.
"On average, banks maintained solid capital and liquidity positions, well above regulatory requirements," the ECB-POLICY-3fdc7763-f2c0-4c30-b494-8614852eaf43>ECB said.
Next year, the ECB-POLICY-3fdc7763-f2c0-4c30-b494-8614852eaf43>ECB will focus its supervisory work on risks stemming from geopolitical changes and a more subdued economy.
"The weakening macroeconomic outlook and structural changes in the economy call for heightened vigilance," it said in a press release. "Geopolitical risks are often not priced in financial markets until they materialise, potentially leading to abrupt risk repricing which could increase risks to liquidity and lead to additional losses."
(Reporting By Francesco Canepa)
The main topic is the ECB's imposition of extra capital charges on 13 euro zone banks due to leverage risk.
The ECB imposed extra charges because the banks were judged to be taking on more risk than they could absorb.
Next year, the ECB will focus on risks from geopolitical changes and a subdued economy.
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