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The Single Decision Board, the European Banking Authority and ECB Banking Supervision welcome the excellent set of actions taken yesterday by the Swiss authorities to be able to guarantee monetary stability. The European banking sector is resilient, with strong ranges of capital and liquidity.
The decision framework implementing within the European Union the reforms really helpful by the Monetary Stability Board after the Nice Monetary Disaster has established, amongst others, the order in keeping with which shareholders and collectors of a troubled financial institution ought to bear losses.
Specifically, frequent fairness devices are the primary ones to soak up losses, and solely after their full use would Further Tier 1 be required to be written down. This method has been persistently utilized in previous instances and can proceed to information the actions of the SRB and ECB banking supervision in disaster interventions.
Further Tier 1 is and can stay an vital part of the capital construction of European banks.
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