RWA deflation bolsters European bank capital levels

Deutsche Bank headquarters Frankfurt HQ green from Adobe 20Apr20 575x375
By Tyler Davies
22 Jul 2020

Credit analysts hope that European banks will be able to report much stronger capital levels in the second quarter, amid early signs that risk-weighted asset (RWA) volumes could be lower than expected.

Most European financial institutions saw their common equity tier one (CET1) ratios fall in the first quarter of 2020.

Part of the pressure came as a result of RWA inflation, as clients borrowed more amid fears about the possible impact of the coronavirus pandemic.

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