ECB flags banks' business model as key risk area; eases focus on capital
[FRANKFURT] Europe's top banking supervisor will prioritise risks associated with banks' business model over capital adequacy this year, it said on Wednesday, signalling its intention to move away from an era where capital levels were at the top of regulators' agenda.
The European Central Bank's Single Supervisory Mechanism, which supervises the eurozone's largest banks, outlined its priorities for the year.
"Among the key risks identified, business model and profitability risk is ranked the highest, followed by other key risks, the importance of which varies across SSM countries," it said in a document published on its website.
Among them, it cited credit risk and heightened levels of non-performing loans, reversal of the search for yield and conduct and governance risk.
Banks' ability to meet upcoming regulatory capital requirements featured at the bottom of the list.
REUTERS
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