Tighter regulations on banks capital adequacy and liquidity

Abstract

Banks will be required to have more and higher-quality capital and liquid assets in the future. The aim is to dampen the pronounced cyclicality of lending by requiring banks to maintain in normal circumstances capital buffers that exceed minimum capital requirements and by setting limits on the growth of banks balance sheets and indebtedness. The liquidity of EU banks foreign branches will in future be supervised by the financial supervisor of the bank s home country.