Regulatory breaks strengthened EU banks’ CET1 ratios in 2020

Top banks in the European Union saw their solvency ratios climb over the course of a wild 2020 – driven not only by earnings, but also a raft of Covid relief measures and fast-tracked changes to the regulatory capital framework.

The average Common Equity Tier 1 (CET1) ratio of 15 major EU lenders tracked by Risk Quantum averaged 14.9% at end-2020, some 70 basis points higher than a year earlier. 

An array of factors affected risk-weighted assets (RWAs) – the denominator of the CET1 ratio –

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