ECB supervisors urge banks to be cautious despite stable situation 

Frankfurt, Feb. 8, (dpa/GNA) - Nearly a year after the start of Russia’s war on Ukraine, the European Central Bank’s (ECB) banking supervisors have said the situation for financial institutions in the eurozone is stable. 

Banks have coped well with the impact of the war thanks in part to their strong capital and liquidity positions and higher profitability, the head of the ECB’s banking supervision, Andrea Enria, said on Wednesday. 

The ECB is keeping capital requirements for institutions roughly constant overall for 2023. For the duration, however, Enria expects further challenges. 

The banks would have to eliminate weaknesses above all in their risk control and corporate governance, the chief supervisor warned. They would also have to assess future developments prudently. 

Some banks in the eurozone had to take large write-downs as a result of the war and the sanctions imposed on and by Russia. 

From the ECB’s point of view, the institutions should also carefully observe the effects of rising interest rates. 

Banking supervisors regularly assess the viability of banks’ business models and risk management. With this information, the authorities set individual capital surcharges for banks and determine, among other things, how much money the institutions may distribute as dividends to their shareholders. 

GNA