FRANKFURT (dpa-AFX) - The major banks in the eurozone are well prepared for crises, according to the European Central Bank (ECB). The institutions display robust capital and liquidity positions, as well as high profitability, the ECB's banking supervision division reported following its annual review of the large financial institutions in the currency area. The ECB expects capital requirements to remain largely stable through 2026.
The ECB noted that European banks continue to operate in a challenging environment, shaped by heightened geopolitical risks and new patterns of competition due to digitalization and the rise of non-bank competitors. "This calls for forward-looking risk assessments and sufficient resilience," the ECB stated.
The ECB's banking supervision regularly assesses the sustainability of banks' business models and their risk management practices through the Supervisory Review and Evaluation Process (SREP). Based on the results, supervisors set additional capital requirements for certain banks and determine, among other things, how much money institutions may distribute to their shareholders as dividends. Deutsche Bank and Commerzbank recently announced that their capital requirements for 2026 have been slightly reduced.
The ECB's banking supervision, established as a response to the global financial crisis of 2008, directly oversees the largest banks in the eurozone. In this latest review, 105 banks under direct ECB supervision were examined./als/DP/jkr
