ECB confirms new Basel-busting Pillar 2 composition

By Tyler Davies
12 Dec 2019

Andrea Enria, chair of the European Central Bank’s supervisory board, has confirmed that eurozone banks will be able to include subordinated debt as part of their Pillar 2 capital requirements. The resulting 90bp improvement in common equity tier one (CET1) buffers could help to offset "unwarranted consequences" from the implementation of Basel III, he said.

Enria was speaking at a hearing in the European Parliament’s economic and monetary affairs committee on Thursday.

He said that recent changes in the EU’s Capital Requirements Directive (CRD V) meant that banks would be permitted to use additional tier one (AT1) and tier two bonds as ...

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