Some euro zone banks need extra buffers amid slowdown: ECB By Reuters


© Reuters. Vice-President of the European Central Bank Luis de Guindos speaks during an event in Riga

FRANKFURT (Reuters) – With euro zone growth slowing, several countries should force their banks to build extra capital buffers to mitigate the risk of unexpected shocks, European Central Bank Vice President Luis de Guindos said on Tuesday.

“The slower growth momentum we are seeing increases the risk of tail events, in other words, shocks that are unlikely to occur, but would have a significant impact on the financial system and the economy if they did,” de Guindos told a conference in London.

“The continued build-up of buffers could therefore be justified, especially in those countries where the long upturn may have led to an underestimation of credit risk or where private indebtedness is particularly high or rising.”

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