BRUSSELS (MNI) – The European Commission Friday denied reports that
the EU was accelerating plans to recapitalize banks that failed or came
close to failing in the bank stress tests whose results were published
in July.
“There is no acceleration of the timetable,” a spokesman for the
Commission declared to journalists.
The nine banks that failed the EU stress test earlier this year are
still expected to present their plans to raise new capital by October
15, he said. The sixteen banks that only scraped by in the tests were
invited to inform banking authorities what they intend to do by April
2012, he said.
Comments from two EU commissioners this week about the possible
need for further bank recapitalizations had been misinterpreted the
spokesman said.
Both the International Monetary Fund and the OECD have suggested
that EU banks should raise more capital, an analysis that EU officials
have rejected. Should banks require additional capitalisation, the
mechanisms to ensure their success are already in place, the spokesman
said.
He cited the pledge by national authorities to provide backstops
for institutions that can’t find sufficient funds from private sources,
and he pointed to new powers planned for the EU bailout fund, the
European Financial Stability Facility, to provide recapitalization
financing for banks.
“It is not the whole system that’s in peril, but some banks”, the
spokesman said. “We know who they are” because of the stress tests, he
added.
Liquidity problems in the interbank market are a result of banks’
mistrust and unwillingness to lend to each other and are not an issue of
solvency or capital, he said.
“It is up to the European Central Bank to facilitate interbank
loans and the fluidity of liquidity flows between banks,” the commission
spokesman said.
–Brussels Newsroom +32405228374 pkoh@marketnews.com
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