ECB eyes 6% capital retention

The European Central Bank favours requiring banks to show they can retain capital worth 6% of their assets when it puts them through a simulated recession later this year, said two euro-area officials with knowledge of the matter.

A majority of policy makers and technical officials have reached consensus on the benchmark for the ECB’s stress test, the officials said, asking not to be identified as the deliberations aren’t public.

The threshold must still be agreed on with the European Banking Authority (EBA) that coordinates the exams, and a small number of countries wanting an easier benchmark may press for a compromise lower than 6% , one of the officials said.