Brussels, 25/02/2015 (Agence Europe) - The president of the Supervisory Council of the Single Supervisory Mechanism (SSM) at the ECB, Danièle Nouy, feels that the European legislator may need to be mobilised to increase the level harmonisation of the definitions of bank capital.
“It's not so much about how much [capital there is], it's about the definition of the capital. There are too many, in my view, national options in the definition of capital in Europe and we have to address that”, Nouy stated in an interview which appeared on the Financial Times website on Tuesday 24 February. She went on to argue that some of the problem could be addressed through the single bank supervisor, but that they may need to go to the legislator to ask for increased harmonisation in the definition of banks' own funds.
Nouy went on to say that the Supervisory Council would be carrying out work to compare the composition of the capital of the123 bank groups under its direct supervision. If necessary, we can compensate for the lack of quality of capital by imposing measures at bank or group level (increased capital requirements, liquidity, indebtedness with the leveraging effect), which remain a matter for the discretion of the supervisors whenever they identify excessive risks. (translation from the original French version)