The president of the European Central Bank (ECB), Christine Lagarde, said on Monday that banks in the euro zone showed financial buffers “well above requirements”, amid skepticism linked to several bankruptcies of US banks and the acquisition credit suisse emergency usbs.
“We are convinced that the capital and liquidity positions of the euro zone banks are very satisfactory,” Christine Lagarde said during a hearing at the European Parliament.
The “own funds ratio” and the “liquidity coverage” are “well above the requirements,” he insisted.
The capital ratios of some 115 large banks directly supervised by the ECB fell in the third quarter of 2022, but remained at a comfortable average level of 14.7%.
Ratios relating on-balance sheet liquid assets to net cash outflows, also closely monitored by the ECB, averaged 160% at the end of 2022, with a minimum of 100% required.
Worrying turbulence in the sector
The ECB met twice last week with its supervisory body for euro zone banks for an “exchange of views” on the banking sector after the turbulence of recent days.
Since March 10, the bankruptcy of SVB and two other US regional banks has revived the specter of the 2008 financial crisis that destabilized the global economy.
In Switzerland, top banking group UBS will buy struggling rival Credit Suisse for a pittance in an operation orchestrated by the Swiss government to restore confidence in the financial system.
Christine Lagarde said last Thursday that the banking sector in the euro zone was “in a much stronger position than in 2008”.
The banking turbulence did not stop the ECB from continuing its fight against inflation by raising its rates on Thursday, as expected, by 0.5 percentage points.
Source: BFM TV
