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ECB to maintain Pillar 2 capital requirements for 2016

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ECB to maintain Pillar 2 capital requirements for 2016

ECB Supervisory Board Chair Danièle Nouy said thecentral bank will not make major changes to its Pillar 2 requirements in 2016,letting banks maintain roughly the same capital buffers as 2015, Reuters reported.

"The level of Pillar 2 capital that we will requestthis year, all other things being equal, will be around what was requested lastyear," she reportedly said.

Nouy said the 2016 buffers will be divided into capitalrequirements and nonbinding "guidance." She added that while failingto meet the central bank's requirements will trigger restrictions on dividendsand other payouts, failure to satisfy the broader guidance will notautomatically impact lenders. However, banks should not take the guidancelightly, Nouy warned, saying: "If we are not satisfied, it can betransformed into requirements."

Nouy's comments come ahead of the European BankingAuthority's stress tests results, which are due July 29 and will determine howmuch Pillar 2 capital a bank must hold, Reuters noted in its July 13 report.