Europe’s banks allowed to hold less capital for funds kept at central banks
The softening of leverage limits will also allow banks to save on capital when they invest in software and fund infrastructure as well as SMMEs
28 April 2020 - 18:05
Brussels — European banks are getting a big break on leverage limits as the region’s policymakers look to keep credit flowing to the economy during the coronavirus pandemic.
A key rule on banks’ indebtedness — the so-called leverage ratio — will be relaxed under a EU proposal announced on Tuesday, enabling banks to hold less capital for funds they keep at central banks. Deutsche Bank, which had €134bn in cash primarily at central banks at the end of 2019, stands to be a major beneficiary...
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