June 13, 2016 / 1:16 PM / 3 years ago

Euro zone banks may be asked to follow capital guidance

FRANKFURT, June 13 (Reuters) - Euro zone banks will not be asked to build up even more capital but may be asked to follow a capital guidance, a non-mandatory case-by-case recommendation, Daniele Nouy, the European Central Bank’s top supervisor, said on Monday.

“This instrument, which we call ‘Pillar 2 guidance’, would be complementary to Pillar 2 requirements,” Nouy told the European Parliament’s economy committee. “Failing to meet Pillar 2 guidance is not in legal terms a breach of capital requirements.”

“But still, banks need to take it seriously: failing to meet Pillar 2 guidance would lead to intensified supervision and institution-specific measures designed to re-establish a prudent level of capital,” she added. (Reporting by Balazs Koranyi; Editing by Catherine Evans)

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