Buffer stops? Why banks haven’t used Covid capital relief
Amid weak credit demand, banks haven’t availed themselves of capital buffers, but they still might
As the coronavirus swept across continents, bank supervisors reassured panic-stricken governments and economies that they had freed up trillions in lending capacity by relaxing requirements for bank capital buffers.
The European Central Bank (ECB) freed €120 billion ($143.6 billion) – to be used either to cover losses or to finance up to €1.8 trillion in additional lending. And in April, a Bank of England Q&A indicated that reducing countercyclical capital buffers alone could support £190
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