ECB Warns Against Weaker Capital Rules
European Central Bank supervisor Pedro Machado cautioned against diluting post-crisis capital safeguards to simplify rules. He defended the output floor as a vital risk backstop while supporting targeted relief for smaller lenders.
European Central Bank supervisor Pedro Machado warned on Tuesday morning against diluting post-crisis capital rules to boost lending. The pushback comes as European banks lobby regulators to ease requirements and improve competitiveness against United States rivals. Preserving rigorous safeguards prevents lenders from understating risks and protects taxpayers from future bailouts, according to the official.