ECB Supervisor Warns Against Softening Bank Capital Requirements

European Central Bank (ECB) supervisor Pedro Machado has cautioned that European banks should not anticipate a dilution of key post-crisis capital safeguards, such as the 'output floor,' as part of efforts to simplify banking rules. Machado emphasized that these backstops are crucial for preventing banks from understating risks and noted that studies provide little evidence of significant economic benefits from lower capital requirements.