FRANKFURT (Reuters) -The European Central Bank will propose reducing the number of capital buffers that banks have to hold and introducing simpler rules for smaller lenders, the ECB’s vice-president Luis de Guindos said on Wednesday.
De Guindos is leading the ECB’s efforts to ease rules for euro zone banks, which have been complaining that they are at a disadvantage to their U.S. peers, particularly given U.S. President Donald Trump’s deregulation agenda.
“Now, for instance, the number of capital buffers of the European banks is above 10, is very complicated,” de Guindos told an event organised by Politico. “We will make a clear recommendation in that regard. Another recommendation will be about proportionality, how… we supervise small banks.”
The ECB is due to finalise its proposals and send them to European Union legislators by the end of the year.
Under its proportionality principle, the ECB aims to tailor its supervisory expectations and reporting requirements for smaller banks to make the process less onerous.
Germany’s Bundesbank has floated the idea of whittling down the number of requirements to just two and having banks meet them in full with equity and their own funds.
In a country where regional and smaller lenders make up nearly half of all banking assets, the Bundesbank is also pushing for a separate regime for “small and non-complex banks”.
(Reporting By Francesco Canepa; Editing by Alex Richardson and Hugh Lawson)
