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ECB's Noyer Urges Banks To Preserve Capital

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Banks should preserve capital instead of paying it to bankers and investors as bonuses, European Central Bank governing council member Christian Noyer said Monday.

Citing recent impressive profits made by banks, Noyer, who is also the chief of the Bank of France, said, "It is striking that these performances were achieved only a few months after some of those same institutions came very close to failure." He noted that it did not mean the banking sector recovered its lost balance and there is no need for further reform.

"Nothing could be further from the truth," Noyer said in Singapore. "One major risk in the period to come is the emergence of a business-as-usual mentality."

Moreover, he said there are signs that parts of the financial industry have resumed risk-taking practices, reminiscent of those which led to the crisis. Hinting at bankers' pay, Noyer said it appears "out of line" with the underlying performance of the industry.

Banks should preserve capital instead of paying it to bankers and investors, European Central Bank governing council member Christian Noyer said Monday. (Market News Provided by RTTNews)

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