The European Central Bank (ECB) announced (click to view the content) a temporary reduction in capital requirements for market risk, by allowing banks to adjust the supervisory component of these requirements.

The measure aims to:

  • Maintain banks' ability to provide market liquidity and to continue market-making activities
  • Temporarily reduce a supervisory measure for banks (the qualitative market risk multiplier)

This decision will be reviewed after six months on the basis of observed volatility.

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