ECB’s Enria offers banks more transparency – but expects more, too

FILE PHOTO: Andrea Enria, chairperson of the European Banking Authority, speaks at Reuters Summit interview in London, Britain, September 25, 2017. REUTERS/Afolabi Sotunde

FRANKFURT (Reuters) – The European Central Bank’s supervisory arm should be more transparent in how it reaches key decisions such as the setting of capital requirements, its new chief Andrea Enria said on Thursday.

But Enria added banks should also be more transparent to protect investors who, under rules implemented after the 2008 global financial crisis, must bear any losses if a lender fails.

“I have heard some calls for more clarity and predictability with regard to our assessments,” Enria said. “I think we should listen to such requests and… why not specify which risk drivers guide our overall decision, for instance?”

The ECB’s Single Supervisory Mechanism has 119 banks on its watch for which it sets capital requirement levels. Some banks disclose this key metric to investors, known in the market as Pillar 2, but some do not.

“Communication is not a one-way street, and it goes beyond the confidential dialogue between supervisors and banks,” Enria said.

“Greater transparency would thus be warranted, I believe.”

(Reporting By Francesco Canepa; Editing by Raissa Kasolowsky)

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