ECB in daily contact with lenders on Russia sanctions

Bloomberg

The European Central Bank (ECB) said it is in daily contact with banks on how they’re dealing with implications from sanctions against Russia over its invasion of Ukraine.
“In particular, we are assessing whether banks have implemented adequate internal governance arrangements and controls to adhere to the sanctions,” Andrea Enria, who leads the ECB’s supervisory board, said during testimony to European Union lawmakers on Thursday.
Many European banks have dialled back their exposure to Russia in recent years, yet the war has sent shocks through commodity markets and
disrupted supply chains for
manufacturing companies. European banks have about 100 billion euros ($111.6 billion) of exposure to Russian counterparties and sanctioned entities make up “only a minor part of this,” Enria said.
Banks would be able to contend even with the “harshest possible situation” where they write off their related assets, Enria said.
“The average capital impact on the European banks would be pretty contained and below 100 basis points, ranging probably between 70 and 90 basis points,” Enria said. “Even the banks with the highest impact would still be able to maintain compliance with our requirements. So the direct exposures is not really where the main concern is.”
The ECB is also monitoring possible second-round impacts on banks, he said. While those indirect effects are more difficult to estimate, Enria cited the following areas:
The ECB is also asking the banks to enhance their preparation for dealing with cyber attacks, according to Enria. “We stand ready to implement swift supervisory actions should the risk situation of individual banks deteriorate,” he said.