BRUSSELS Oct 6 The European Commission is
likely to propose that European banks hold capital equal to at
least 3 percent of their debt in a planned overhaul of EU
banking rules, due in the next few weeks, an EU official said on
That ratio tallies with a recommendation in August from the
European Banking Authority (EBA) and is also in line with
proposals by the Basel Committee of global banking regulators.
"We are likely to propose a 3 percent leverage ratio," the
official said. "We think the 3 percent, or slightly above, is a
good figure for what is after all a backstop."
Deutsche Bank, ABN Amro and Societe
Generale were among European banks found with a
leverage ratio slightly below 3 percent in the latest EU-wide
banking stress test published by the EBA in July.
Separately, International Monetary Fund Managing Director
Christine Lagarde said on Thursday that Deutsche must look at
its business model but that it is not the only bank that needs
to do so.
Italy's Banca Monte dei Paschi was the only lender
with a negative leverage ratio under the test's adverse scenario
based on banks' balance sheets in December 2015.
Larger banks were likely to be required to hold capital
above 3 percent, the official said, also in line with Basel
The European Central Bank, as the supervisor of euro zone
lenders, will maintain the power to impose higher requirements
on specific banks, but will not be able to apply a ratio
different from 3 percent "across the board", the official said.
The Brussels-based EU Executive will present its legislative
proposal "by the end of the year", as part of expected wider
reforms of EU banking and capital requirement rules meant to
introduce deals agreed at global level into EU legislation.
The legislative package is in the Commission's agenda on
Nov. 16, but may be pushed back to later this year, Commission
The package will not include a revision of banks' internal
models to calculate risk and other elements of a further reform
of global banking rules still under discussion at the Basel
(Reporting by Francesco Guarascio; Editing by Louise Ireland)