Background
In preparation for the Single Supervisory Mechanism (SSM), all 'significant' Eurozone banks are taking part in the European Central Bank's (ECB) comprehensive assessment, with results to be announced in October 2014.
The fourth in a series of papers on the SSM produced by the EMEA Centre for Regulatory Strategy, this paper is designed to help banks understand, plan for and manage the capital gap challenge that may arise from the results of the assessment. Meeting this challenge may expand beyond capital raising. Supervisors will also consider underlying governance, policy, data and process issues that may have contributed to the shortfall arising. Some well-capitalised banks may be asked to tackle problem legacy assets.
The paper draws together expertise from across Deloitte to analyse the key aspects, likely stakeholder reactions and feasibility of the various options available to banks looking to address shortfalls against regulatory capital requirements. We make the case for banks to take early, but considered, action.
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The Single Supervisory Mechanism - Mind the (capital) gap (PDF)
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