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Large banks in the euro zone can meet their requirements of capital even if they have to completely write-off of their exposure to Russia, stated European Central Bank (ECB) supervisory board chairman Andrea Enria said in a letter.

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After Russia’s military incursion on Ukraine and the following sanctions imposed by the West on Moscow have put European units of some Russian banks out of business while some European banks had to exit Russia or think of making such a move.

While commenting that the exposure to Russia was concentrated in nine banks, Enria noted that these large banks could deal with a write-off of their direct links to Russian units and of the equity in subsidiaries operating in Russia.

ECB monitors 115 largest banks in the euro zone, reported Reuters.

In a letter to members of the European Parliament, Enria stated: “All banks involved would maintain sufficient headroom over the minimum and buffer requirements.”

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The nine banks would see their capital depletion between 70 basis and 95 basis on average in the wake of a wipe-out.

Enria pointed out that for none of these banks, the impact would be more than 200 basis points.

ECB is tracking implementation of sanctions by the banks against Russia.

Enria warned about indirect risks stemming from the conflict, ranging from an economic slowdown which could lead to fluctuation in the commodities market.

“Supervisors are in regular contact with the relevant banks to monitor their risk profiles, assess their reactions and identify any vulnerabilities at an early stage,” he added.