EBA Says EU Banks Must Raise $147 Billion of Capital

Thursday, 27 Oct 2011 07:09 AM


Oct. 27 (Bloomberg) -- Europe’s banks will need to raise 106 billion euros ($147 billion) in fresh capital under tougher rules being introduced in response to the euro area’s sovereign debt crisis, according to the European Banking Authority.

Following is a table showing the EBA’s breakdown by country of the estimated target capital buffers. Amounts are in millions of euros:

NOTE: * The sovereign capital buffer is indicative and can already be covered by existing CT1 capital if the CT1 ratio exceeds 9%. (1) The capital package for Greece has been defined in such a way not to conflict with pre-agreed arrangements under EU/IMF program. This assistance program already defines a set of targets for the banks in question, including quantitative objectives for the Core Tier 1 ratio, which are being monitored on a regular basis. The existing backstop facility (30 billion euros) exceeds the results of the EBA capital exercise for Greek banks. (2) This amount, which is attributable to Dexia Group, should be considered as pro-forma. After the cut-off date of Sept. 30, this group has indeed been deeply restructured through the sale of Dexia Bank Belgium to the Belgian State for 4 billion euros while a state guarantee is hitherto provided on the funding issued by Dexia SA and its subsidiary Dexia Credit Local. Furthermore, other disposal of important operating entities will take place in the coming months. (3) A substantial part of this amount is attributable to Volksbank Group and should be considered as pro-forma. This group is currently under deep restructuring and evaluation of its business model after which Volksbank Group shall end up in a regional active bank. (4) As an EFTA state of the EEA, any requirement and supervisory action pertaining to capital needs in Norwegian banks is within the competence of Norwegian authorities

Source: EBA

--Editors: Dylan Griffiths, Stephen Taylor.

To contact the reporter on this story: Zoe Schneeweiss in Vienna at zschneeweiss@bloomberg.net

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net

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