ECB / Robert Metsch
The ECB has set the minimum Common Equity Tier 1 (CET1) capital adequacy ratio at 11.2% of risk-weighted assets for next year, which is a slight reduction from 11.3% in 2025.
European financial institutions are currently keeping their CET1 ratios well above the required minimum. As of the end of the second quarter, the average CET1 ratio across the industry was 16.1%, according to the ECB.
Banks in the region are now seeing improved profits after a long period of negative interest rates. These profits, along with extra capital, are being used to pay dividends and repurchase shares.
The ECB remains concerned about risks from trade conflicts and geopolitical issues, but the stress test results published in August indicate that the banking sector is in a strong position to handle such challenges.
source: reuters.com
European financial institutions are currently keeping their CET1 ratios well above the required minimum. As of the end of the second quarter, the average CET1 ratio across the industry was 16.1%, according to the ECB.
Banks in the region are now seeing improved profits after a long period of negative interest rates. These profits, along with extra capital, are being used to pay dividends and repurchase shares.
The ECB remains concerned about risks from trade conflicts and geopolitical issues, but the stress test results published in August indicate that the banking sector is in a strong position to handle such challenges.
source: reuters.com
