The Head of the European Central Bank (ECB) was seen before the press conference on the outcome of the Governing Council meeting outside the ECB headquarters in Frankfurt, Germany, March 7, 2019. REUTERS / Kai Pfaffenbach
FRANKFURT (Reuters) – One bank in the eurozone does not meet the capital requirements of the European Central Bank for 2019, which means it will face restrictions on how much it can pay to investors and executives, ESB's presentation showed on Monday.
The ECB did not ask any bank in its annual presentation on the reputation of leading eurozone lenders, which showed a slight increase in capital requirements from the previous year, as the EU's "protective layers" were introduced after the financial crisis in stages.
Analysts carefully follow these requirements as each bank does not face the limitations of how much it can pay dividends, bonuses and certain coupons and is under pressure to increase capital.
Most of 119 ESB-controlled banks had more first-rate equity capital (CET1) than required by supervisors. Four hardly did the required level, and only one did not meet it, he showed a slide of the ECB presentation.
"The most important institutions already have capital levels above the CET1 level and tampons required by the ESB and the national authorities," the ECB said in a statement.
ESB asked Italian Carige to collect more capital last year, but it did not do so after its main shareholder withdrew at the last moment. It is currently under the management named by ESB and looking for buyers.
As part of its oversight and evaluation process (SREP), ESB also issued "quantitative requirements for SREP for liquidity" to three banks, which probably means that they need to allocate more cash, such as foreign exchange rates.
Reporting by Francesco Canepa; Editing Raissa Kasolowsky