They clarify the order of priority that would guide the intervention of supervisors in the event of a crisis
MADRID, 20 Mar. (EUROPA PRESS) –
The European Central Bank (ECB), as supervisor of the banking sector, the Single Resolution Board (SRB) and the European Banking Authority (EBA) have expressed their satisfaction with the measures adopted yesterday by the Swiss authorities to guarantee financial stability and have defended the soundness of the capital and liquidity position of European banks.
“The European banking sector is resilient, with solid levels of capital and liquidity,” the financial authorities said in a joint statement, after UBS agreed to buy Credit Suisse on Sunday in a transaction promoted by the Swiss Government.
Likewise, the three institutions have recalled that the resolution framework that implements in the European Union the reforms recommended by the Financial Stability Board after the financial crisis has established the order according to which the shareholders and creditors of a bank in trouble must bear the losses.
In particular, common equity instruments are the first to absorb losses, and only after their full use would the amortization of additional Tier 1 capital be required.
This approach has been consistently applied in previous cases and will continue to guide the banking supervision actions of the SRB and the ECB in crisis interventions.
In this way, they defend that the additional Tier 1 is and will continue to be an important component of the capital structure of European banks.
