ECB to only ask banks for extra capital for bad loans if talks fail

FRANKFURT (Reuters) – The European Central Bank will only ask banks to set aside extra capital for their bad loans via Pillar 2 demands if talks with the lenders on the matter fail, a senior ECB supervisor said on Tuesday.

“Only if the results of this structured dialogue do not convince us will we consider Pillar 2 measures,” Sabine Lautenschlaeger, who represents the ECB’s supervisory arm on the central bank’s board, said.

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