No room for lowering capital demands on euro zone banks: ECB’s Hakkarainen

HELSINKI (Reuters) – There is no room for lowering capital requirements for euro zone banks, a European Central Bank supervisor said, citing a 2010 study that put the ideal level of Tier 1 capital at between 16 percent and 19 percent of risk-weighted assets.

“I do not see anything within recent research that leads me to think this estimate was too high,” Pentti Hakkarainen told an audience in Helsinki.

“As both our minimum standards and global banks’ current capital ratios remain somewhat short of this level – I see no room for relaxing capital requirements at this time,” he added.

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