AIB and EBS have been fined by the European Central Bank (ECB) for miscalculating their capital needs over a period of two years. The risk weighted assets in question related to “intragroup equity exposures”, meaning cross investments between the banks and related companies. They did not involve loans to customers, which are also counted as risk weighted assets when measuring capital strength. “Underestimating risk-weighted assets means the banks did not calculate their capital needs properly,” the ECB statement said. "The CET1 ratio is a key indicator of a bank’s capital strength and its ability to absorb losses.”

Source: Irish Independent September 10, 2021 17:48 UTC