The European Central Bank will take greater account of stress tests when setting buffers that lenders should hold on top of the minimum requirements for financial strength.
Starting this year, the regulator will split banks into four groups based on how hard they were hit in upcoming tests when calculating the buffer known as Pillar 2 Guidance, ECB Supervisory Board Chair Andrea Enria said on Wednesday. Supervisors will then make adjustments to ensure the measure reflects the riskiness of individual banks, he said.
The European Central Bank will take greater account of stress tests when setting buffers that lenders should hold on top of the minimum requirements for financial strength.
Starting this year, the regulator will split banks into four groups based on how hard they were hit in upcoming tests when calculating the buffer known as Pillar 2 Guidance, ECB Supervisory Board Chair Andrea Enria said on Wednesday. Supervisors will then make adjustments to ensure the measure reflects the riskiness of individual banks, he said.
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