Andrea Enria, Europe’s top banking regulator, called for powers to create a legally-binding list of financial instruments that banks can count as part of their loss-bearing reserves.
The European Banking Authority should keep a strict list of authorized capital structures to make sure that no European Union state diverges from the region’s standards for so-called core tier one capital, Enria, chairman of the EBA, said in a speech in Dublin at a conference organized by Ireland’s central bank.
“Strong mechanisms should be put in place to make sure that there is no room for watering down the requirements,” Enria said.
The EBA, set up last year to harmonize banking rules across the European Union, has told banks to raise 114.7 billion euros ($186 billion) in fresh capital by the end of June as part of measures introduced to respond to the euro area’s sovereign-debt crisis.
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