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ECB’s climate stress may impact capital requirements: Enria

ECB’s climate stress may impact capital requirements: Enria

FRANKFURT, GERMANY - JULY 9: Euro sign. European Central Bank headquarters in Frankfurt in Germany in summer day on July 9, 2014 in Frankfurt, Germany.

The European Central Bank’s ongoing climate stress test was not designed to force non-compliant banks to hold more capital but that could still be the outcome of the exercise, ECB bank supervisory chief Andrea Enria said on Monday.

“The main outcome will be reflected in qualitative recommendations,” Enria said in a speech.

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“It might well be the case that serious shortcomings identified in governance or risk management practices may affect the banks’ scores, and therefore indirectly have a quantitative effect on Pillar 2 requirements,” he added. (Reporting by Balazs Koranyi; Editing by Jon Boyle)

Source: Reuters

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