The vice-president of the European Central Bank has raised the question of whether banks have sufficiently large capital buffers that can be released in the event of a downturn.
Luis de Guindos said the current limited available capital for release constrains room for manoeuvre of authorities, making it harder to support the economy in a severe economic scenario.
He made his comments as he addressed the ECB Forum on Banking Supervision in Frankfurt.
Mr de Guindos said there seems to be scope to have a higher share of capital in the form of releasable buffers, and this is something that other authorities outside the euro area are examining.
He said a deteriorating global economic outlook means it is particularly important that banks remains resilient and can withstand adverse shocks.
Mr de Guindos warned the increasing uncertainty may put pressure on banks' profits and hamper bank lending, as margins become squeezed and the flow of new business slows down.
"Since the financial crisis, the resilience of euro area banks has improved significantly," Mr de Guindos said.
"This has been facilitated by the economic recovery and by an accommodative monetary policy stance. But most of all, it reflects both the increased market pressure for banks to be well-capitalised, and the introduction of regulatory reforms, including macroprudential buffers", he stated.
Mr de Guindos said current regulatory required buffers amount to just 1% of banks' assets and are intended to absorb losses.
But only the countercyclical capital buffer (CCyB) can be released in a severe downturn to help banks and the economy, he said.
Just seven of the 19 euro area countries have activated their CCyB, he told the audience, adding that it represents a very limited about of capital relative to other requirements.
This limited available capital for release constrains the room for manoeuvre of supervisory authorities, he claimed, making it harder to support the economy in a severe downturn.
"In the current environment, it is therefore legitimate to question whether the banking system has a sufficiently large capital buffer that can be released," he said.
"Even if we consider the level of capital to be appropriate, there still seems to be scope to have a higher share of capital in the form of releasable buffers," he added.
He said that looking around the world, we see that other authorities, for example in the UK and the US, are having similar discussions.