Capital overhaul depresses Crédit Agricole’s solvency ratio
Wind down of “Switch” mechanism may have come at a bad time for the French lender
Risk-weighted assets (RWAs) at French lender Crédit Agricole SA (CASA) swelled 7% to €347.5 billion in the first three months of 2020 as it swallowed a change to the capital framework for securitisations and unwound a long-standing guarantee mechanism with its sister banks.
RWAs increased €11.9 billion in Q1 as CASA dismantled 35% of the so-called “Switch” guarantee, whereby the regional banks that are part of Crédit Agricole Group cover some of the regulatory capital requirements of CASA’s
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