(Finance) – Thephasing out some of the ECB’s support measures for banksintroduced to increase the capacity of institutions to support the economy during the pandemic, it will have no material impact, as the banking sector remains well capitalized. This is the opinion of Scope Ratings, after yesterday the European Central Bank stated that it did not consider it necessary to allow banks to operate below the capital level defined by the Pillar 2 Guidance beyond December 2022, nor to extend the measure beyond March 2022. which allows them to exclude central bank exposures from their leverage ratios.
“Perhaps counter-intuitively, we believe that the reversal of the measures is good for the sector as it is helps dispel any uncertainty on the path to post-Covid normalization – said the rating agency – The withdrawal was well communicated and ordered. There is no abrupt end to the support and we believe the sequence of the withdrawal of measures is appropriate. “
Scope points out that the large European banks maintain adequate reserves for their leverage ratio requirements and tightened funding conditions “is not a cause for concern, given the rapid build-up of deposits and liquidity coverage ratios well above the requirements.”
In parallel with the announcement of the withdrawal of the support measures, the ECB also announced the results of the 2021 Supervisory Review and Evaluation Process (SREP), as well as the Pillar 2 requirements applicable in 2022 for banks under its supervision. “On average, P2R increased only marginally, reflecting broadly stable SREP scores, salso defending the view that banks can stand up on their own“observes Scope.