Top Stories
Austrian regulator orders system-relevant banks to up capital buffers
Global Banking & Finance Review®
Company
BERLIN (Reuters) – Austrian banking regulator FMA said on Thursday it has ordered system-relevant banks in the country to increase their capital buffers by 0.25 percentage points to 0.5 percentage points, in response to uncertainty triggered by the war in Ukraine.
BERLIN (Reuters) – Austrian banking regulator FMA said on Thursday it has ordered system-relevant banks in the country to increase their capital buffers by 0.25 percentage points to 0.5 percentage points, in response to uncertainty triggered by the war in Ukraine.
The buffers are to be built up gradually by end-2023, FMA said in a statement.
Among those counted as system-relevant banks in Austria are Erste Group, Raiffeisen Bank International and UniCredit Bank Austria.
(Writing by Rachel More, Editing by Miranda Murray)
A capital buffer is a reserve of capital that banks are required to hold to absorb potential losses. It helps ensure that banks remain solvent during financial stress.
A system-relevant bank is a financial institution whose failure could trigger a financial crisis due to its size, interconnectedness, or critical functions in the financial system.
A banking regulator oversees financial institutions to ensure their safety and soundness, compliance with laws, and protection of consumers and the financial system.
Capital adequacy refers to a bank's ability to maintain sufficient capital to cover its risks and obligations, ensuring financial stability and protecting depositors.
Capital buffers are crucial for maintaining a bank's resilience against financial shocks, helping to prevent insolvency and protect the overall financial system.
Explore more articles in the Top Stories category
