The bank capital requirements in the SSM: a supervisory approach

• Main Author: Costa, Luís Filipe Gouveia Machado e
• Publication Date: 2018
• Format: Master thesis
• Language: eng
• Source: Repositórios Científicos de Acesso Aberto de Portugal (RCAAP)
• Download full: http://hdl.handle.net/10362/49535
• topic: Bank capital structure; Banking supervision; Capital requirements

The financial and supervisory data collection and analysis of the 128 significant institutions of the SSM shows that in 2017, on average, European banks were operating with a considerable excess regulatory total capital ratio. Although this might empirically challenge part of the literature – according to which banks would tend to operate with as much leverage as they are allowed to – a more granular analysis shows that despite the level playing field envisaged by the Banking Union, there are still statistically significant national differences among Pillar 2 capital add-ons, which were expected to address strictly idiosyncratic risks of institutions.