ECB Cuts Banks’ Capital Bar Slightly on Stress Test Strength

The European Central Bank slightly lowered the amount of capital that it tells banks to hold, supporting their capacity to make shareholder payouts after sailing through a financial health check earlier this year.

“The euro area banking sector is in a very robust position,” Claudia Buch, who leads the ECB’s Supervisory Board, said in a Bloomberg TV interview. Lenders “by and large” plan to distribute about 50% of their profits as they face a “balancing act” with the need to invest in IT and other measures to ensure their resilience, she said.