ECB warns against weakening bank capital rules amid payout concerns

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The European Central Bank has issued a warning regarding potential reductions in bank capital rules. The ECB expressed concerns that this could lead to increased shareholder payouts, compromising lending strength in the economy.

The European Central Bank cautioned on Monday against reducing capital requirements for banks in the region, with its chief supervisor warning that such measures could increase shareholder distributions rather than boost lending to the economy. Claudia Buch, who leads the ECB’s Supervisory Board, told euro-area finance ministers that lower capital requirements would put the resilience ...