Bank and Treasury Management

QUESTION 2 (50 points)

Please explain based on the chart below all relevant aspects of the regulatory capital requirements banks have to comply with in the EU.

During the CoViD19-crisis, ECB agreed to ease the capital restrictions for banks. Please explain such rationale and its impacts for the banking industry.

Pillar 2 Guidance (P2G) (Bank specific) G-SI Buffer O-SII Buffer Systemic risk Countercyclical Capital Buffer Capital Conservation Buffer (2.5%) Pillar 2 Requirement (P2R) (Bank specific) Tier 2 (2%) Additional Tier 1 (1.5%) Common Equity Tier 1 (4.5%)