State-backed Covid loans have light capital impact – EBA
Bank loans guaranteed by European Union member states tied up three times less regulatory capital than other corporate obligations, data from the European Banking Authority (EBA) shows.
As of end-June, €181 billion ($213.9 billion) of loans held by EU banks were subject to state-backed guarantees, about 1.2% of their total. Banks accounting for €162 billion of these exposures also reported their associated risk-weighted asset (RWA) amounts: €29 billion. RWAs are used to set regulatory capital
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