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MNI BRIEF: Banks Unable, Unwilling To Use Full Buffers - ESRB


Euro area banks may not always be able or willing to use their capital buffers to offset losses during stressful periods without triggering minimum leverage ratio (LR), own funds and liabilities (MREL) requirements or risk-weighted capital framework obligations, a report by the European Systemic Risk Board (ESRB) concludes.

However, there is considerable heterogeneity across regions, countries and banking types. Full implication of Basel III protocols will improve capital buffer usability, the ESRB states, but significantly improved buffer usability would require legal changes.

MNI London Bureau | +44 20 3983 7894 |
MNI London Bureau | +44 20 3983 7894 |

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