BRUSSELS (MNI) – Less than half of Europe’s 70 biggest banks will
need to raise new capital, European Banking Authority chairman Andrea
Enria told EU finance ministers Wednesday.
The 33 banks, whose total capital shortfall is still estimated by
the EBA to be “close” to the E106 billion estimate published in October,
will also have more time to submit their plans for achieving a core tier
one ratio of 9%, EU officials heard the EBA chair say.
The EBA, which must approve the plans, intends to push the deadline
for their submission back a couple of weeks from the end of 2011 to
mid-January, EU officials told Market News International.
Enria said that one-third of the money that banks need to raise
would be to reach the 9% ratio, one third would be a buffer against
sovereign bond losses, and another third would be to meet Basel III and
EU capital requirement rules.
Poland’s finance minister, Jacek Roskowski, who chaired the finance
ministers meeting, emphasized the ministers’ insistence that banks not
meet the 9% level simply by deleveraging.
Banks began deleveraging in the third quarter of this year, Enria
told finance ministers, according to EU officials who were present at
the talks. EU leaders and their finance ministers last month approved
with the EBA a plan to recapitalize Europe’s biggest banks in hopes of
insulating the financial sector from the sovereign debt crisis, after a
stress test in July failed to reassure markets.
They also called for public authorities to set in place support
schemes to guarantee banks’ access to short term financing.
While the focus had previously been on national support schemes,
some countries and analysts called for joint guarantees to ensure that
public guarantees for banks would be credible in weaker countries.
Richer governments, however, balked at the idea, so instead the European
Commission will tomorrow present guidelines to ensure that national
guarantees comply with EU rules on state aid.
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