FRANKFURT (Reuters) -The European Central Bank is easing some of the checks it makes on euro zone banks, from how lenders get approval for share buybacks to how stress tests are carried out, ECB
ECB Reduces Oversight on Bank Buybacks and Stress Tests, Says Donnery
ECB's Easing of Bank Regulations
FRANKFURT (Reuters) -The European Central Bank is easing some of the checks it makes on euro zone banks, from how lenders get approval for share buybacks to how stress tests are carried out, ECB supervisor Sharon Donnery said on Monday.
Pressure from Lenders
The ECB is coming under pressure from lenders it oversees to ease the supervisory burden as the Trump administration promises easier rules in the United States and shadow banks gain ground in the credit business.
Simplification Measures
Writing in a blog post, Donnery listed measures the ECB has taken, including speeding up the approval of new appointments, buybacks and internal models, and reducing the amount of work demanded from banks during stress tests.
Regulatory Framework for Small Banks
But she repeated her position that simplification should not go too far if the sector is to remain robust.
"The ECB is turning words into action and making banking supervision as simple as possible, but not simpler, to make sure banks are able to stay resilient and are well prepared to manage risks in their portfolios," she wrote.
An ECB task-force, chaired by Vice President Luis de Guindos and also including Donnery, has recently presented a number of possible simplification measures to the Governing Council that are now being discussed by the euro zone's 20 national central banks.
Germany's bank regulators have proposed creating a separate regime for "small and non-complex banks", which would subject them to a single capital requirement rather than the full array foreseen under EU rules.
Under this optional regime, banks with less than 10 billion euros ($11.73 billion) in assets, with a strong domestic focus and a small trading book would be required to have a leverage ratio - capital expressed as a percentage of total assets - "significantly higher than 3%", the non-paper prepared by Germany's Bundesbank and Bafin shows.
Donnery said earlier this year that the regulatory framework was already less strict for "small and non-complex" banks, although she saw scope for "more proportionality".
The EU delayed new, global rules governing banks' trading earlier this year as it awaited more clarity regarding the U.S. administration's plans to deregulate its financial sector.
($1 = 0.8527 euros)
(Reporting By Francesco Canepa; Editing by Joe Bavier)
