European banks warn against piecemeal capital approach

LONDON, Sept 24 (Reuters) - The European Banking Federation (EBF) said capital needs to be boosted in some areas but told world leaders meeting on Thursday that a coordinated global approach could limit the need to build up more capital.

"European banks acknowledge that levels of capital need to be reinforced in some areas, but warn against the piecemeal approach to date that lacks a comprehensive impact assessment," the European bank lobby group said in a statement to coincide with the meeting of G20 world leaders.

The supervision of systemically important banks can be strengthened by supervisory and regulatory measures such as stress tests, the EBF said.

"Adequate implementation of such measures would make the building up of more capital requirements unnecessary," Alessandro Profumo, president of the EBF and chairman of Italy's Unicredit (CRDI.MI), said in the letter.

G20 leaders are expected to discuss reform of capital standards for banks, requiring banks to hold more and better quality capital.

In the letter the EBF urges the G20 leaders to take into account the cumulative impact of the individual measures that will demand higher capital requirements of banks, including the possible introduction of a non risk-based leverage ratio.

European banks have raised billions of euros this year to boost their capital levels and Unicredit is one of several considering raising more capital.

Brussels-based EBF represents the interests of 5,000 European banks. (Reporting by Steve Slater; Editing by Greg Mahlich)